RWE replaces top management at UK unit after operations problems

* Paul Coffey takes over as CEO from Paul Massara

* Martin Miklas new CFO, Jens Madrian leaves npower

* Npower cut outlook earlier this month (Recasts, adds CEO quote, shares)

By Christoph Steitz

FRANKFURT, Aug 24 (Reuters) - Germany's RWE (Xetra: 703712 - news) has ousted the top management at npower following operational problems at the British unit that sent RWE shares to their lowest levels in 24 years this month.

Npower cut its guidance in mid-August, blaming problems in its billing process which prevented it from properly charging clients as well as growing competition that caused more clients to switch to competitors.

Npower Chief Operating Officer Paul Coffey will replace Chief Executive Paul Massara, who will leave npower, RWE said on Monday. The unit's finance chief Jens Madrian will be replaced by Martin Miklas, currently chief financial officer at RWE (Amsterdam: RW6.AS - news) Polska.

The management reshuffle at npower was first reported by Reuters last week.

"At this time we need a CEO at RWE npower who knows the processes and has a sense for what can be done," RWE Chief Executive Peter Terium said in a statement.

"In his previous functions, Paul Coffey has repeatedly demonstrated this expertise," he said.

Coffey, 45, has been with RWE since 2003 and joined npower this year from RWE's renewable unit Innogy, where he also held the position of COO.

At 1207 GMT, shares in RWE were down 7 percent, underperforming a 4.9 percent slide in Germany's blue-chip index .

"It (Other OTC: ITGL - news) is clear that RWE npower's domestic business is not performing in the way that our customers, shareholders, or our employees demand," Coffey said in the statement.

RWE COO Rolf Martin Schmitz said Britain remained an important market for the group and that the company would do everything in its power to overcome the problems at the unit. (Editing by Maria Sheahan and Susan Thomas)