HOUSTON, July 8, 2002 — Reliant Energy Inc. said that it has received authorization from the Securities and Exchange Commission to adopt a new holding company structure (under the name CenterPoint Energy) and allow it to complete the spin-off of Reliant Resources Inc. and separate Reliant Energy into two companies.
REI Chairman, President and CEO Steve Letbetter stated that the SEC action is another significant milestone toward the establishment of two well-positioned and independent companies that are poised for leadership in their individual market sectors.
“We are very pleased by the SEC action,” Letbetter said. “The separation into two companies is the right strategic step for both Reliant Resources and the new CenterPoint Energy. The companies have different markets, different strategies and different aspirations. By moving forward as independent companies, each will be able to focus its full energies on what it does best.
“In addition,” Letbetter said, “each company should have enhanced access to capital as separate entities.” As previously indicated, Reliant Energy and Reliant Resources are currently in discussions with their banks regarding extension of bank credit facilities required by each company on a going forward basis.
“We have worked hard to lay the groundwork for the business separation — putting in place separate management teams and developing unique long-term strategies explicitly tailored for each company,” Letbetter said. “We are looking forward to building two great businesses that will continue to focus on providing value to shareholders, customers and employees.”
The company said the only regulatory action still required before forming the holding company and completing the spin-off is an extension by the Internal Revenue Service of the ruling it issued in January 2002 that the spin-off will be tax-free to CenterPoint Energy and its shareholders. The earlier ruling contemplated implementation of the new holding company structure and completion of the spin-off by April 30, 2002. Reliant has asked the IRS to extend that date and expects that the IRS will grant the extension in the near future.
The company expects to complete all necessary corporate actions and other related activities required for the spin-off later this summer.
Reliant Energy, based in Houston, Texas, is an international energy services and energy delivery company. The company has nearly 31,000 megawatts of power generation in operation in the U.S. and nearly 3,500 megawatts of power generation in Western Europe. Reliant Energy’s retail marketing and distribution operations serve approximately four million electricity and natural gas customers in the U.S. More information on Reliant Energy can be found on its web site at www.reliantenergy.com .