Williams Communications Emerges from Bankruptcy

Williams Communications Group Inc., a national carrier selling voice and data services to other communications companies over a 33,000-mile backbone network, today announced it has emerged from bankruptcy with a lot less debt and a new name, WilTel.

WilTel emerges with a new $375 million credit facility and no “substantial” debt obligations other than commitments related to its headquarters, according to a statement released today.

Williams Communications, based in Tulsa, Okla., filed for bankruptcy protection in April listing $7.15 billion in debt. The company posted an annual net loss of $3.8 billion, or $7.86 per share.

Technology analysts say the carrier owns one of the most advanced long-haul networks in the country and serves a solid base of telecom companies, including its largest customer SBC Communications Inc. Williams Communications had 353 network services customers at the end of last year.

Leucadia National Corp., a New York-based holding company involved in banking and lending among other industries, has invested $150 million in WilTel and purchased the claims of the telecom operator’s former energy parent, The Williams Companies, for $180 million, which are pending federal regulatory approvals.

Leucadia will gain a 44 percent equity stake in WilTel while unsecured creditors owed approximately $2.5 billion hold a 54 percent controlling interest in the carrier. Williams Communications shareholders may retrieve up to a two percent equity stake in WilTel through a court-approved injunction.

Howard Janzen, Williams Communications’ president and chief executive, has resigned, leaving a vacancy at the top post and on the board of directors. WilTel has not named a new replacement.

Unlike other powerful telecom executives who raked in hundreds of millions of dollars selling company stock before public shareholders saw their equity vanquished over the last two years, Janzen never sold his stake in Williams Communications, a spokesperson said earlier this year. In May, The Wall Street Journal reported Janzen was one of five Williams Communications executives awarded $13 million in "retention bonuses" to repay company loans. Janzen owed $5.6 million to the company at the end of 2001, according to an article published today in Dow Jones Newswires.

Williams announced its plan this summer to change its name to WilTel within two years. WilTel, the predecessor of Williams Communications, tapped decommissioned pipelines in the 1980s to operate fiber-optic cables. In 1995 WilTel was sold to LDDS, which then became WorldCom Inc. The Williams Companies bought back the rights to the name.