Williams May Sell More Assets to Protect Debt Rating

TULSA, Okla. — Williams Cos. said Monday that it may sell pipelines and other assets to raise cash to protect its credit rating because the company may be liable for $2.4 billion in debt and lease costs from its spun-off communications business.

Williams’ shares fell $2.64, or 14%, to $16.36 on the New York Stock Exchange on concern the company will be unable to raise enough cash from asset sales and will sell more stock, analysts said. A share sale would dilute the value of holdings that already are down by one-third since Enron Corp. filed for bankruptcy Dec. 2.

“They’ve got to quantify their exposure to Williams Communications, and then we can all make a judgment,” said Carl Domino, who manages $1.5 billion in value stocks for Northern Trust Corp. “Now, no one knows what’s going to happen.” Domino’s second-biggest holding as of Sept. 30 was Williams with 127,000 shares.

Last week, Tulsa, Okla.-based Williams delayed the release of fourth-quarter results to review the expenses of Williams Communications Group Inc., which it spun off in April. Those costs will be included in fourth-quarter earnings.

Meanwhile, Williams Communications posted a smaller fourth-quarter loss than Wall Street expected but also said that its banks warned of a possible default on terms of a credit agreement.

Williams said it “strongly disagrees” with the banks’ position.

Still, investors sent the company’s stock down 42 cents, or 30%, to $1 on the Big Board.

The company’s net loss narrowed to $372 million, or 76 cents a share, from $546.6 million, or $1.18, a year ago. Its operating loss was 52 cents, better than the 57 cents analysts expected. Revenue grew 15% to $330 million.