Williams May Sell More Assets to Protect Debt Rating

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.