UPDATE 1-Reliant to seek strategic alternatives

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NEW YORK, Oct 6 (Reuters) - Power producer Reliant Energy (RRI.N) said on Monday it was exploring "strategic alternatives" a week after it cut its profit forecast and said it had raised $1 billion to support its business.

The Houston-based company, which operates a wholesale and retail electricity business, said in a statement there was no assurance that the process to assess its strategic alternatives would result in any transactions.

"In light of the challenges facing our industry and the economy as a whole, we believe it is appropriate to explore the full range of options to enhance stockholder value while we continue to execute on our current business plan," Mark Jacobs, president and chief executive officer, said in a statement.

Morgan Stanley and Goldman Sachs & Co will serve as financial advisers, and Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel.

Shares of Reliant have tumbled 54 percent since the company announced last week its 2008 profit would be lower than previously expected because of the impact of Hurricane Ike on its sales as well as the effect from lower commodity prices.

Reliant also said it would unwind a credit agreement with Merrill Lynch, and had obtained $1 billion in new capital to replace the facility.

Analysts have estimated the new facilities would cost the company about $100 million per year more than the Merrill Lynch facility.

Shares of Reliant were unchanged from Friday's close at $5.59 in pre-market trade on the New York Stock Exchange. (Reporting by Matt Daily)