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To: Proud_Infidel who wrote (1669)	3/11/2002 4:58:49 PM
From: EepOpp	Read Replies (1) \| Respond to of 2260

Williams Comms Buying Fiber-Optic Assets siliconinvestor.com Mar 11 2:46pm ET TULSA, Okla. (Reuters) - Williams Communications Group Inc. , which is weighing bankruptcy, on Monday said its former corporate parent would provide the $750 million needed by the company to purchase certain fiber-optic assets used in its operations. In return, the former parent, energy giant Williams Cos. , will receive unsecured debt or equity in Williams Comms worth up to $750 million. Williams Comms, which provides high-speed network services to telecom carriers and large corporations, said the purchase was part of its restructuring plan. Network operators face massive debt, slack demand for high-speed capacity and declining rates for transmission services. Deborah Trevino, a Williams Comms spokeswoman, declined to give details of the restructuring plan, reiterating that the plan would be disclosed at the end of March. "As we move forward toward restructuring, this helps us preserve our flexibility because now (the fiber-optic assets are) an asset that we own and are entitled to, as opposed to leasing it," Trevino said. The purchase is due to close on March 29. Williams Comms reiterated that it could file for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code. Williams Cos. said its provision of the $750 million "was factored into the earnings, balance sheet and liquidity numbers that have been reported in filings and were presented to investors during the past week." Williams Comms was spun off from Williams Cos. in April 2001. It has failed to attract enough sales to fund operations, expand its network and pay nearly $500 million in annual interest on more than $5 billion in debt, according to analysts. On Feb. 25, Williams Comms said it might file for bankruptcy. The news sent its stock down more than 60 percent and prompted the credit-rating agencies Standard & Poor's and Fitch to cut their ratings on the company. At that time, Williams Comms said it aimed to cut its costs by 25 percent and that job cuts would likely be on that scale as well. If the Tulsa, Oklahoma-based company does file for bankruptcy, it would be only the latest network operator to become insolvent. Global Crossing Ltd. filed for bankruptcy in January amid allegations of improper accounting, and Qwest Communications International Inc. was forced to tap a $4 billion line of credit last month after failing to find buyers for its short-term debt. Other telecom upstarts, such as XO Communications Inc. , plan to restructure their balance sheets through debt-for-equity swaps. Covad Communications Group Inc. emerged from bankruptcy in December after its reorganization plan eliminated $1.4 billion in debt. A bankruptcy by Williams Comms could have serious ramifications for Williams Cos., which guaranteed $1.4 billion of Williams Comms debt and a $750 million lease at the time of the spin-off. Shares of Williams Comms, which trade on the over-the-counter bulletin board, were up 5 cents, or 33 percent, at 20 cents in afternoon dealings. The stock traded as high as $61.81 in March 2000. Williams Cos. shares were unchanged at $22.83 on the New York Stock Exchange.