Following two days of meetings that concluded late Thursday, the board of directors of Reliant Energy Inc. voted to remove Steve Letbetter as chairman and CEO of the regulated business, which is undergoing a name change to CenterPoint Energy. Once set to become the non-executive chairman of CenterPoint, he also stepped down from the board of directors.

Letbetter will remain chair and CEO of Reliant Resources Inc., the unregulated business.

The decision was made to ensure shareholders have a clear understanding that there will be two separate businesses: CenterPoint, which will hold all of the regulated entities of former Reliant Energy, and Reliant Resources Inc., which will hold the unregulated businesses.

The board also voted to distribute Reliant Energy’s 83% ownership in Reliant Resources to shareholders. Each Reliant Energy shareholder as of the close of business Sept. 20 will receive 0.79% of a common share of Reliant Resources for each common share owned. The distribution ratio is subject to final adjustments, and the stock dividend, payable Sept. 30, will complete the split.

In a written statement, Letbetter said, “This business separation will allow each company to reach its full potential.”

CenterPoint’s new chairman will be Milton Carroll, a board member since 1992, and currently chairman and CEO of Houston-based Instrument Products, which makes oil field equipment. David McClanahan, now vice chairman of Reliant Energy and president of the company’s delivery group, will serve as CenterPoint’s president and CEO.

When a portion of Reliant Resources was spun off from Reliant Energy last year — at a time when energy trading and marketing was driving the profits — its opening-day price of $30 made a spectacular splash. On Thursday, Reliant Resources, now enmeshed in federal inquiries and investigations, closed down at $5.10.

Reliant Resources, which has lost most of its early investor enthusiasm, now is chasing bank loans totaling $1.3 billion due in October and December. A $2.9 billion loan, related to its acquisition of Orion Power Holdings, expires in February. Meanwhile, it may have a new name, but CenterPoint is taking on Reliant Energy’s indebtedness as well, with $4.7 billion in bank loans expiring in October.

With the separation, CenterPoint will have approximately 11,500 employees, with about 7,000 based in the Houston headquarters. Reliant Resources’ employees number around 6,200, with nearly 3,000 based in Houston.

©Copyright 2002 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.