WILLIAMS Communications denies debt allegation

Thursday, August 30th 2001, 12:00 am
By: News On 6

TULSA, Okla. (AP) _ Officials with Williams Communications Group deny the company has a debt bill it can't pay.

The Tulsa telecommunications company is not required to make a hefty cash debt payment next month as had been reported, said Scott Schubert, Williams Communications' chief financial officer.

Company officials said Williams has to show the bank it has generated $700 million in cash as of Sept. 30, not pay the amount.

``All the money stays with us,'' Schubert said. ``The commitment we made with the lender was that we would raise cash. This enhances our liquidity.''

Massachusetts financial analyst and author Peter Cohan had been quoted as saying the company might not be able to make a Sept. 30 financial obligation.

Williams Communications on Monday received $550 million in cash and notes when it closed the sale of its 50 percent interest in Algar Telecom Leste SA, a Brazilian wireless carrier, to America Movil SA.

The company also sold the U.S. portion of its Solutions segment in March for $100 million in cash and a $75 million promissory note. It also entered into a collection agreement for $200 million in accounts receivable, and sold its Canadian Solutions operations for $38 million.

Schubert said an additional $500 million in cash is expected by Dec. 31 through an equity issue and the sale-leaseback of the company's new 15-story technology center.

In an Aug. 15 letter to shareholders, chairman and chief executive officer Howard Janzen said reports that the company's business plan is failing are false.

``With funding that takes us into 2004, a plan to be free cash flow-positive by the end of 2003 and the right team and strategy in place, we are positioned to not only survive the current shakeout, but thrive in the years to come,'' Janzen said.