Calpine Corp.
Synopsis
In early 1999, Calpine Corp.'s CEO Pete Cartwright adopted an aggressive growth strategy with the goal of increasing the company's aggregate generating capacity from approximately 3,000 to 15,000 megawatts (MW) by 2004. He believed there was a fleeting opportunity to repower America given the inefficiency and age of current generating capacity as well as the recently granted ability to compete in wholesale power markets. To achieve the new goal, Calpine will have to build or acquire as many as 25 power plants at a total cost of $6 billion (approximately $500,000 per 1,000 MW). For a company with assets of $1.7 billion, a subinvestment grade debt rating, a debt-to-capitalization ratio of 79%, and an after-tax cash flow of $143 million in 1998, raising this much money was going to be a formidable challenge.
- Copyright:
- 2001 HBS
Book Details
- Book Quality:
- ISBN-13:
- Publisher:
- Harvard Business Publishing
- Date of Addition:
- 2016-08-03T00:49:55Z
- Language:
- English
- Categories:
- Usage Restrictions:
- This is a copyrighted book.