Williams to buy back shares from Berkshire Hathaway investment

Tuesday, May 20th 2003, 12:00 am
By: News On 6

TULSA, Okla. (AP) _ Williams Cos. will repurchase nearly 1.5 million preferred shares for $289 million from MidAmerican Energy Holdings Co., Warren Buffett's energy investment concern, the companies said Monday.

Williams also said it will refinance part of a $900 million, 1-year loan it received last year during a cash crisis from Buffett's Berkshire Hathaway Inc. and Lehman Brothers Holdings Inc.

Refinancing the high-interest loan will enable the Tulsa-based natural gas company to lower its interest payments and maintain its fragile liquidity.

The repurchase price represents a 5 percent premium on the $275 million that MidAmerican, controlled largely by Berkshire Hathaway, paid when it bought 1.47 million preferred Williams shares in March 2002.

MidAmerican and Williams said they expect the repurchase agreement to close in June after Williams gains approval from its banks. Williams said it will finance the deal through a $275 million private bond issue.

The equity buy and the loan were among several investments Buffett made in the troubled energy sector last year. He also purchased pipelines cheaply from Williams and Dynegy Inc. as the companies faltered amid Enron Corp.'s collapse.

The 1-year loan received on Aug. 1 saved Williams from a potential bankruptcy as $800 million in debt payments beyond its cash and credit reserves were coming due.