Williams Communications to Complete Financial Restructuring and Reduce Debt
By Approximately $6 Billion Through a Negotiated Chapter 11 Filing
TULSA, Okla., Apr 22, 2002 /PRNewswire-FirstCall via COMTEX/ -- Williams
Communications Group, Inc. (OTC Bulletin Board: WCGR), the parent company of
Williams Communications, LLC, today announced that it has entered into
agreements with its principal creditor groups regarding certain significant
terms of a debt restructuring to reduce the Company's debt by approximately $6
billion through a negotiated Chapter 11 filing. Over 90% of the Company's bank
lenders were joined by an ad hoc committee of bondholders in reaching these
agreements.
In order to effectuate the plan, the Company has filed a voluntary petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S.
Bankruptcy Court for the Southern District of New York and expects to file a
plan of reorganization in the near future.
The Company's operating subsidiary, Williams Communications, LLC, is not
expected to be involved in the Chapter 11 reorganization process. Accordingly,
the filing is not anticipated to affect domestic or international business
operations of Williams Communications, which the Company intends to continue
uninterrupted.
"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. "During the Chapter 11 process, Williams
Communications' operations and its customer relationships will have the
opportunity to continue, along with its strong customer commitment and focus."
The Company and its bank lenders and bond holders have entered into a lock-up
agreement pursuant to which the creditor groups will vote in favor of a plan of
reorganization consistent with the terms outlined in the lock-up agreement. The
lock-up agreement will remain in place until July 15, 2002, although the Company
may obtain an automatic extension to October 15, 2002, if it has filed a plan of
reorganization and has met certain other conditions.
The lock-up agreement establishes a framework for a reorganization in which 100%
of the holding company's pre-petition unsecured claims would be converted into
100% of the common stock of the reorganized company. The lock-up agreement also
requires Williams Communications to raise at least $150 million through
additional debt or equity investment prior to approval of the plan of
reorganization in order to facilitate the Company's commitment to prepay $450
million of its bank debt, $200 million of which was prepaid upon execution of
the lock-up agreement.
The Williams Companies, Inc., the Company's third principal creditor and former
parent, previously agreed not to oppose a plan of reorganization as long as
certain conditions were met. These conditions include providing for the
treatment of certain of Williams' unsecured claims in a manner substantially
identical to the treatment of other unsecured claims against the Company, not
impairing Williams' claims related to certain service and lease agreements, and
containing other terms related to the treatment of certain service and lease
agreements still in place following the spin-off of the Company.
After the Company files the proposed plan of reorganization, the court must
first approve the proposed plan and disclosure statement, which will then be
distributed to all members of the principal creditor groups for approval. Taken
as a whole, the respective agreements signed by the Company's principal creditor
groups establish a framework for the Company's anticipated Chapter 11 plan.
However, the outcome of this process cannot be predicted with certainty.
"Williams Communications has a strong customer base and a sound operation. We
believe that with a strengthened balance sheet, Williams Communications will be
better positioned to succeed over the long-term," Janzen added.
About Williams Communications Group, Inc.
Based in Tulsa, Okla., Williams Communications Group, Inc., through its
operating subsidiary Williams Communications, LLC, is a leading broadband
network services provider focused on the needs of bandwidth-centric customers.
Williams Communications operates the largest, most efficient, next-generation
network in North America. Connecting 125 U.S. cities and reaching five
continents, Williams Communications provides customers with unparalleled
local-to-global connectivity. By leveraging its infrastructure, best-in-breed
technology, connectivity and network and broadband media expertise, Williams
Communications supports the bandwidth demands of leading communications
companies around the globe. For more information, visit
www.williamscommunications.com .
All trademarks are the property of their respective owners.
Contact: Deborah Trevino Lindsay Hurley
Williams Communications Williams Communications
(media) (investors)
(918) 547-4764 (918) 547-3773
deborah.trevino@wcg.com lindsay.hurley@wcg.com
SOURCE Williams Communications Group, Inc.
CONTACT: media, Deborah Trevino, +1-918-547-4764,
or deborah.trevino@wcg.com , or investors, Lindsay Hurley, +1-918-547-3773,
or lindsay.hurley@wcg.com , both of Williams Communications Group, Inc. |
