Oct. 11, 2000Taking the next step to separate into two publicly traded companies, Reliant Energy Inc., Houston, Wednesday said its current chairman, CEO, and president, Steve Letbetter, will serve as chairman and CEO of the unregulated company.
David McClanahan, president and chief operating officer of the Reliant Energy Delivery Group, was named president and CEO of the regulated company. Letbetter will also serve as nonexecutive chairman of the regulated company.
In early trading, Reliant stock was off 1/8 at 45 7/16.
Reliant announced July 27, subject to regulatory approval and favorable market conditions, plans to separate into two publicly traded companies. The company said management structure of the two companies as well as other key aspects of the business separation plan will be announced in the coming weeks.
If regulators approve, Reliant said it plans an initial public offering (IPO) of about 20% of the common stock of its unregulated operations in early 2001. Following a successful IPO, the remaining stock of the unregulated company will be distributed to shareholders within 12 months, the company said.
Reliant said the initiative is intended to satisfy regulatory requirements under Texas restructuring legislation, to enhance shareholder value, to highlight the specific investment appeals of each resulting entity, and to permit the individual units to focus on their respective business and market opportunities.
In July, Reliant said unregulated company will own Reliant Energy’s unregulated power generation and related energy trading and marketing operations; its unregulated retail businesses, which currently include energy, telecommunications, and internet services; and the company’s European electric generating and trading and marketing operations.
Reliant also said in July the plan will propose that in 2004 the unregulated company will receive from the regulated company cash equal to the market value of the regulated company’s interest in its Texas regulated generation operations. In addition, the unregulated company will have an option to purchase the regulated company’s generation capacity.
Letbetter was named president and chief operating officer of Reliant Energy in January 1997 and became chief executive officer in June 1999. As president and chief operating officer of the Reliant Energy Delivery Group, McClanahan is responsible for all of Reliant Energy’s regulated natural gas and electric distribution companies , including Reliant Energy Arkla, Reliant Energy Entex, Reliant Energy HL&P/Entex and Reliant Energy Minnegasco.