Williams Communications Group Files Bankruptcy Petition

Williams Communications Group Inc., the parent company of Williams Communications LLC, announced Tuesday it has filed a Chapter 11 bankruptcy petition that will help the company eviscerate $6 billion in debt and convert all unsecured claims into common stock.

More than 90 percent of the company’s bank lenders and

an ad hoc committee of bondholders reached the agreements, Williams Communications Group said.

The bankruptcy filing is not expected to affect the domestic and international operations of Williams Communications LLC, a nationwide carrier’s carrier based in Tulsa, Okla.

Under a “lock-up” plan, all of the company’s pre-petition unsecured claims would be converted into 100 percent of common stock. Williams Communications spokeswoman Lisa Price said she could not immediately say how much of the company’s debt included unsecured claims, including high-yield bonds.

The lock-up agreement also would require Williams Communications to raise $150 million through additional debt or equity financing prior to the approval of a reorganization plan.

Once a reorganization plan was approved, Williams Communications would pay off $250 million in bank debt. The company said Tuesday it already retired $200 million in bank debt upon execution of the lock-up agreement.

Williams Communications is the latest national carrier’s carrier to file a bankruptcy petition, following in the footsteps of 360networks Corp. and Global Crossing Holdings Ltd.

Williams Communications provides wholesale services to communications companies around the country over a 33,000-mile backbone network.

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