GSC Acquisition — SPAC Merger (July 2008)
29 slides from GSC Acquisition's SPAC merger presentation, Jul 31, 2008
Slide 1: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "anticipates", "may", "can", "believes", "expects", "projects",
Slide 2: Additional Information and Where to Find It
ADDITIONAL INFORMATION AND WHERE TO FIND IT This communication is being made with respect to a proposed merger and related transactions involving GSCAC and Complete Energy. In connection with these proposed transactions, GSCAC has filed with the Securities Exchange Commission ("SEC") a preliminary p
Slide 3: Growth Opportunity in Power Generation
Growth Opportunity in Power Generation o Increasing global competition for energy and growing domestic consumption are driving growth in demand for power generation infrastructure o Resulting in increasing replacement cost and value of generation assets o U.S. projected growth will outstrip currentl
Slide 4: Why Invest in Complete Energy Now?
Why Invest in Complete Energy Now? o Skilled and experienced management team that is highly incentivized to grow the Company o Strong and continuing growth in the U.S. power sector o Favorable power market dynamics and robust growth in California and the Southeast -- Complete Energy's key regional m
Slide 5: Complete Energy Investment Highlights
Complete Energy Investment Highlights Experienced Management & Strong Sponsorship o Managed by a team of industry veterans with a wealth of knowledge in energy asset acquisition and management o Proven track record in operations, maintenance, commodity risk management, labor relations, regulatory co
Slide 6: Experienced Management Team
Experienced Management Team o High quality management team able to rapidly grow the company and take advantage of favorable industry dynamics. Full range of in-house capabilities including: o Operations: physical operations, commodity trading and hedging, tolling, asset management, development and c
Slide 7: Strong Sponsor Support
Strong Sponsor Support GSCAC Founder & Manager o Alternative asset manager with $22 billion of AUM as of 3/31/08 o Senior management team with over 60 years of combined experience in both private and public investments o Experience across many industries o Demonstrated ability to creatively structur
Slide 8: Description of the Facilities
Description of the Facilities McKittrick, CA Batesville, MS La Paloma Batesville 1,022 MW Natural gas-fired, combined cycle Electrical interconnection: ZP-26 with deliverability into NP-15 and SP-15 Gas supply: Kern Mojave Pipeline 837 MW Natural gas-fired, combined cycle Electrical interconnection:
Slide 9: Positioned for Growth
Positioned for Growth Tightening Power Markets La Paloma: California market is close to a supply/demand imbalance Based on the terms of a recently signed PPA, La Paloma's estimated EBITDA would be $162 million. See page 25 for details We believe that La Paloma's valuation is approaching replacement
Slide 10: Attractive Valuation
Attractive Valuation Current Share Price ($) (1) 9.42 Fully Diluted Shares (mm) (2,3) 53.9 Pro Forma Net Project Debt (4) 622 New Mezzanine Note 50 Minority Interest (5) 203 Allocated EV: La Paloma 958 Allocated EV: Batesville 426 - -------------------------------------------------------------------
Slide 11: Attractive Valuation Relative to Calpine
Attractive Valuation Relative to Calpine ----------------------------------------------------------------------------------------------- Gross Capacity (1) EV/kW Value (MW) ($) ($mm) ----------------------------------------------------------------------------------------------- Calpine Share Price (
Slide 12: Strong Equity Growth with Limited Downside
Strong Equity Growth with Limited Downside Limited downside due to value approaching replacement cost 12
Slide 13: Summary of Investment Opportunity
Summary of Investment Opportunity Management team poised to capture the growth opportunities in the power industry and expand existing asset base Valuation relative to Calpine indicates Complete Energy is undervalued by more than $3 per share Material increase in shareholder value from expansion, de
Slide 14: Transaction Overview
Transaction Overview Purchase price of $1.3 billion enterprise value for 100% of Complete Energy and all of the equity in its two natural gas-fired generating facilities $900 million purchase price for La Paloma $400 million purchase price for Batesville Approximately $183 million of cash expected f
Slide 15: Transaction Overview
Transaction Overview Transaction Consideration Management Key Approvals Expected Closing Purchase price of $1.3 billion enterprise value for 100% of Complete Energy and all of the equity in its two natural gas-fired generating facilities $900 million purchase price for La Paloma $400 million purchas
Slide 16: Appendices
Appendices
Slide 17: Constantly in the News: Supply / Demand Imbalance
Constantly in the News: Supply / Demand Imbalance " Components and construction materials for nuclear power plants scored the biggest run-up in costs, up 173% -- nearly tripled - since 2000. Most of that increase has taken place since 2005." The Wall Street Journal 23 May 2008 "While both natural ga
Slide 18: Declining Reserve Margins Will Benefit Existing Generators
Declining Reserve Margins Will Benefit Existing Generators Tightening reserve margins drive increasing capacity factors and eventual need for new build Reserve margins in California are declining... ... which has led to higher spark spreads... Source: Based on NP-15 on-peak power prices and SoCal ga
Slide 19: Declining Reserve Margins Will Benefit Existing Generators
Declining Reserve Margins Will Benefit Existing Generators Tightening reserve margins drive increasing capacity factors and eventual need for new build capacity Reserve margins in SERC are declining... Source: Based on Entergy on-peak power prices and Henry Hub gas prices sourced from Intercontinent
Slide 20: Declining Reserve Margins Will Benefit Existing Generators
Declining Reserve Margins Will Benefit Existing Generators Tightening reserve margins drive increasing capacity factors and eventual need for new build capacity Reserve margins in SERC are declining... Bohs Beso, tne nung «158 : 18798 8 2 * et wa ze SSE ae BaGRERA gaa ES source: Verbs source: Vang +
Slide 21: Normalized EBITDA Methodology
Normalized EBITDA Methodology "Normalized" results and projections include adjustments for timing of planned major maintenance and non- recurring events including: Major Maintenance - -- Each of La Paloma's four units requires a 45-day "C" inspection approximately every four years. A normalized year
Slide 22: Summary of Normalized EBITDA
Summary of Normalized EBITDA 2007 (5) ------------------------------------------------------ ($ in millions) La Paloma Batesville Corporate(9) Combined ---------------------------------------------------------------------------------------------------------- CEH LLC Loss before Min. Interest (per pr
Slide 23: Summary of Normalized EBITDA
Summary of Normalized EBITDA 2007 ® 2008 * (Sin millions) La Paloma Batesville Corporate? Combined _LaPaloma Batesville Corporate Combined CEH LLC Loss before Min. Interest (per proxy) * (28.0) Batesville Income from Op. 1/1/07 - 3/14/07 35 Batesville Interest Expense 1/1/07 - 3/14/07 (4.4) Batesvil
Slide 24: Recent Announced Construction Projects
Recent Announced Construction Projects Peaking facilities in California are currently being built at costs in the range of $1,000/kW Peaking CCGT ------------------------------------------------------------------------- Tesla Humboldt Starwood-- Panoche Sentinel Generating Bay Midway Energy Energy F
Slide 25: Implications of Current PPA Market Pricing
Implications of Current PPA Market Pricing Panoche Energy Center Overview: NP-15 Zone, CA Project Overview - ------------------------------------------------------------------------------------------- Net Installed Capacity (MW) 400 Construction Cost ($mm) (1) 415 Implied Cost / kW ($) 1,038 Estimat
Slide 26: Compelling Valuation of Batesville Based on Recent Precedents
Compelling Valuation of Batesville Based on Recent Precedents Southaven is a recent and comparable transaction supporting Batesville's valuation TVA's Acquisition of Southaven On April 3, 2008, TVA announced that it would acquire the three-unit, 810 MW Southaven Power combined-cycle combustion turbi
Slide 27: Compelling Valuation of Batesville Based on Recent Precedents
Compelling Valuation of Batesville Based on Recent Precedents TVA’s Acquisition of Southaven = On April 3, 2008, TVA announced that it would acquire the three-unit, 810 MW Southaven Power combined-cycle combustion turbine facility from Cogentrix Energy, LLC purchase price of $461.3 million located i
Slide 28: Transaction Structure
Transaction Structure GSCAC acquires Complete Energy for implied $1.3 billion enterprise value Sources & Uses of the Consideration Offered ------------------------------------------------------------------------------- Existing Net Project Debt 627 GSCAC Shares to Current CEH Owners (2) 69 GSCAC Sha
Slide 29: Transaction Structure
Transaction Structure GSCAC acquires Complete Energy for implied $1.3 billion enterprise value Sources & Uses of the Consideration Offered ee en 2 GSCAC Shares to Current CEH Owners? 69 Cash to Repay HoldCo Debt & Fees 133, eee 2 Se = eed . ao a ee 2 See a La Paloma & Batesville Minority Interests®