Williams obtains financing, agrees to sell assets
Thursday, August 1st 2002, 12:00 am
By: News On 6
Williams Companies has pulled out of a yearlong nose dive, at what many believe was the last minute. The company announced Thursday they have acquired nearly $3.5-billion in cash and credit.
News on Six business reporter Steve Berg says these new developments seem to catch Wall Street by surprise. Virtually overnight, Williams has built up a war chest they say will take them to the end of the year and beyond.
Steve Malcolm, Williams Companies CEO, "This is a cash rich company today." What a difference a day makes. If this were a boxing match, then Williams Companies was down for the count and suddenly jumped off the canvas swinging. "We had a near-term liquidity crisis that we have resolved decisively. Williams is not going out of business, we are not filing for bankruptcy."
But Williams still has a big black eye. The energy trading unit took a huge loss in the 2nd quarter, enough to wipe out what was otherwise a profitable company. Analysts say its Williams biggest problem. They say they will take one of two paths. One of those would be to find a partner to invest in the energy unit. "It has to be a complete cure for that issue so that we can go out and be successful in that space, and if we don't believe that we can be successful, then we've got to go down the other road." The other is to sell the energy trading unit altogether. That should be determined in the not-too-distant future.
But employees are just glad they have a future. Wall Street has responded. The Fitch Rating Agency has changed the outlook on Williams rating from to negative to "evolving".