Williams Communications hopes for quick end to Chapter 11

Williams Communications today announced it is overhauling its bankruptcy reorganization plan and hopes to emerge from Chapter 11 in the fall with the help of $330 million infusion from Leucadia National Corp.

Leucadia has agreed to invest the funds in exchange for a 45% equity stake in the retooled Williams, which plans to adopt a moniker from one of its previous divisions, WilTel. The deal leaves 55% of the equity to be divided among creditors holding Williams’s $6 billion in debt. Williams hopes to emerge from bankruptcy with $500 million in debt and an additional $100 million in mortgage obligations.

Williams Communications filed for bankruptcy in April while its parent company continued to chug along in the energy trading and pipeline business. Once the Communications Group emerges from bankruptcy, however, it will become completely independent of Williams Corp., faced only with the small matter of buying back the WilTel name from WorldCom. Part of the Leucadia deal will sever all debt between parent and child, paying $180 million in cash to eliminate the $2.3 billion the Communications Group owes Williams Corp.

--Kevin Fitchard, Staff Writer