Williams Companies gets a new line of credit

Allaying fears of bankruptcy for now, there's a major new announcement involving Williams Companies. There is word they've secured a desperately needed new line of credit. <br><br>News on Six

Wednesday, July 31st 2002, 12:00 am

By: News On 6

Allaying fears of bankruptcy for now, there's a major new announcement involving Williams Companies. There is word they've secured a desperately needed new line of credit.

News on Six business reporter Steve Berg says CNBC is reporting that Williams has gotten a billion-dollar line of credit from Lehman Brothers. No word from Williams itself, but we're told that trading of the stock has been temporarily halted, which is a sign that something big is going on. In this case something good.

Here's more on why this line of credit is so important. Williams Companies is continuing to walk a financial tightrope. Money manager Fredric Russell says the best way to balance the company is a fast infusion of cash. "When all is said and done, in every financial circumstance, and for every company, cash is king, or if you're a feminist, cash is queen." Analysts say Williams has about $700-million in cash on hand. They have $300-million in debt that matured Wednesday. And $350-million in debt that matures Thursday. On top of that, the company may have to put-up as much as $300-million collateral for upcoming energy trades. You can do the math for yourself. "This new line of credit is highly important."

There are still concerns about the huge losses in the energy trading unit and whether it can be a moneymaker anytime soon. But for the time being, Williams can breathe a little easier about their cash-flow situation.