Williams Communications to suspend quarterly dividend

Monday, April 1st 2002, 12:00 am

By: News On 6

TULSA, Okla. (AP) _ Struggling Williams Communications said Monday it was suspending quarterly stock dividend payments to cut expenses and was delaying some interest payments for 30 days.

But its auditor, Ernst & Young LLP, warned that if Williams Communications is unable to restructure its balance sheet, its bank lenders may take steps that could disrupt the telecommunications company's ability to continue as a going concern

The auditor's statement was included in Williams Communication's annual report filing, released Monday.

Ernst & Young based the statement on a notice by the company's lenders that the company may be in default under the terms of its credit facility.

Since late February, Williams Communications has been exploring the possibility of seeking Chapter 11 bankruptcy protection.

The company said Monday it was working closely with creditors ``to formulate a comprehensive restructuring of its balance sheet that will enable Williams Communications not only to continue to operate, but to thrive as a leading provider of broadband services going forward.''

The company plans to take advantage of a 30-day grace period for interest payments of about $91 million that were due April 1.

Williams Communications ran into problems after it built a 33,000-mile fiber-optic network. It has been unable to generate enough revenue from the network to satisfy a consortium of banks.