Apr, 2002 : Williams Communications files for Chapter 11
📅 - Williams Communications Group (williamscommunications.com) filed for Chapter 11 bankruptcy protection yesterday, in a bid to restructure its debt. The company amassed $5.9 billion in debt constructing a 33,000-mile fiber-optic network that transmits video, voice and data signals throughout the continental United States.
In a statement, the company revealed that it filed for voluntary bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. Williams Communications expects to file a plan of reorganization in the future.
Williams' latest annual report revealed a negative net worth for the first time and included a $2.6 billion asset write down that raised 2001 losses to $3.8 billion, or $7.86 a share.
"After considering all options, it was determined that a Chapter 11 financial restructuring would be the best method to restructure the holding company's balance sheet while at the same time protecting the ability of Williams Communications to continue operations without interruption," said Howard Janzen, Chairman and Chief Executive Officer in the statement.
As part of the bankruptcy announcement, Williams Communications Group also said its bank lenders and bond holders had entered into a "lock-up agreement" as part of which its creditors would vote in favor of a reorganization plan if it followed the terms of the agreement.
The lock-up agreement is valid until July 15 but the company can obtain an automatic extension until Oct. 15, if it files a plan of reorganization and met certain other conditions.
Under the terms of the reorganization outlined in the lock-up agreement, all of Williams' unsecured claims would be converted into 100 per cent of the stock of the reorganized company. The agreement also requires Williams' to raise at least $150 million in debt or equity before the reorganization plan is approved so that the firm will be able to prepay $450 million of its bank debt.
Williams Communications, not unlike other firms within the telecommunication sector, has experienced difficulties due to reduced demand, heavy competition and network overcapacity. The Tulsa, Okla.-based firm has cut approximately 800 jobs, suspended quarterly stock dividends and delayed interest payments in a cost reduction demanded by a consortium of 45 banks holding Williams' debt. Last month, the New York Stock Exchange suspended trading of the company's shares.
The bankruptcy filing was not unexpected since Williams had previously extended the deadline to restructure its debt three times. The company had been required to pay $91 million in interest on $1.7 billion in senior redeemable notes by May 1.
Several of Williams' other competitors, including Global Crossing and 360networks, have also filed for Chapter 11 protection recently.
In a statement, the company revealed that it filed for voluntary bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. Williams Communications expects to file a plan of reorganization in the future.
Williams' latest annual report revealed a negative net worth for the first time and included a $2.6 billion asset write down that raised 2001 losses to $3.8 billion, or $7.86 a share.
"After considering all options, it was determined that a Chapter 11 financial restructuring would be the best method to restructure the holding company's balance sheet while at the same time protecting the ability of Williams Communications to continue operations without interruption," said Howard Janzen, Chairman and Chief Executive Officer in the statement.
As part of the bankruptcy announcement, Williams Communications Group also said its bank lenders and bond holders had entered into a "lock-up agreement" as part of which its creditors would vote in favor of a reorganization plan if it followed the terms of the agreement.
The lock-up agreement is valid until July 15 but the company can obtain an automatic extension until Oct. 15, if it files a plan of reorganization and met certain other conditions.
Under the terms of the reorganization outlined in the lock-up agreement, all of Williams' unsecured claims would be converted into 100 per cent of the stock of the reorganized company. The agreement also requires Williams' to raise at least $150 million in debt or equity before the reorganization plan is approved so that the firm will be able to prepay $450 million of its bank debt.
Williams Communications, not unlike other firms within the telecommunication sector, has experienced difficulties due to reduced demand, heavy competition and network overcapacity. The Tulsa, Okla.-based firm has cut approximately 800 jobs, suspended quarterly stock dividends and delayed interest payments in a cost reduction demanded by a consortium of 45 banks holding Williams' debt. Last month, the New York Stock Exchange suspended trading of the company's shares.
The bankruptcy filing was not unexpected since Williams had previously extended the deadline to restructure its debt three times. The company had been required to pay $91 million in interest on $1.7 billion in senior redeemable notes by May 1.
Several of Williams' other competitors, including Global Crossing and 360networks, have also filed for Chapter 11 protection recently.
Reads: 1039 | Category: General | Source: TheWHIR : Web Host Industry Reviews
URL source: http://www.thewhir.com/marketwatch/wil042302.cfm
Want to add a website news or press release ? Just do it, it's free! Use add web hosting news!
📅 - 
📅 - 
📅 -