TULSA, Okla. – Williams Communications Group said on Monday it may reorganize under Chapter 11 bankruptcy protection, reversing earlier statements when the company stated it did not expect bankruptcy or any reorganization.
Williams, a high-speed communications network operator, said it continues talks with its banks to develop a restructuring plan to strengthen its balance sheet, but options now under consideration could substantially dilute the value of its shareholders' equity.
If the company filed for bankruptcy, it would become the latest network operator to become insolvent as the industry buckles under a massive debt load, slack demand for high-speed capacity, and declining rates for transmission services.
The company said it has to consider bankruptcy because it realized that certain institutions other than banks are unlikely "to participate in the restructuring process on terms that are beneficial to all stakeholders of the company."
It said bankruptcy would allow uninterrupted continuation of the business and minimize any impact to customer and vendor relationships. The company plans to reduce its cost structure by about 25 percent, which will include work force reductions.
Williams said it had over $1 billion in cash as of December 31, 2001 and it is current on of its obligations. Additional details were not immediately available.