The broadband-network Chapter 11 club gained its latest member in Williams
Communications Group Inc. Tuesday, as the Tulsa, Okla.-based operator filed for
reorganization in U.S. Bankruptcy Court for the Southern District of New
York.
Williams is seeking to cut its debt by approximately $6 billion with the
filing -- a move supported by more than 90 percent of the company's lender
banks, according to a company press release.
The reorganization process will not impact Williams' broadband-service
operations, according to company officials.
'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,' Williams CEO and
chairman Howard Janzen said in a prepared statement.
The company and its lender bands and bondholders have entered a lockup
agreement to outline the reorganization plan.
The lockup agreement -- which sets the framework for reorganizing 100 percent
of the holding company's pre-petition unsecured claims into 100 percent
converted stock in the reformed company -- will be active until July 15, with an
option to extend it to Oct. 15.
It also requires Williams to raise at least $150 million in debt or equity
investment as part of a $450 million prepayment toward its bank
debt.
