Tulsa-based Williams Sunday said the board of directors Sunday authorized management to pursue a course of action that could lead to a complete separation of the company's energy and communications businesses.
Keith E. Bailey, chairman, president, and chief executive officer, said that, while no specific course of action has been determined, the process would take no more than 18 months.
He said any change from the current ownership structure would be contingent upon a number of factors, including ensuring favorable tax treatment for Williams's shareholders. Last October, Williams sold a portion of Williams Communications in public and private equity offerings. Williams retains ownership of approximately 85% of Williams Communications.
"We believe these steps are the best way to ensure that both our energy and communications businesses have the efficient and effective access to the capital necessary to pursue the substantial growth opportunities that each enjoys," Bailey said in a statement. He said the company would have further comment on the issue for the time being.
Earlier this month, Williams Communications it was considering plans to sell $700 million of senior notes in a private placement. The company said the proceeds from the sale of the securities would be used to continue the enhancement and expansion of the Williams Communications network and for working capital and general corporate purposes.
Williams Communications is expected to announced second quarter results Thursday.
Energy telecom pioneer Williams first entered the telecommunications industry with WilTel and became the fourth largest carrier after AT&T, MCI, and Sprint before selling its system to LDDS Worldcom in 1995 for $2.5 billion. The company reentered the business as a long-haul carrier after its noncompete agreement with Worldcom expired.
Williams's rebirth as an energy-telecom hybrid took place after it bought Transco, a Houston-based energy and pipeline company, with the funds from the sale of WilTel. Two years later, Williams began using Transco�s right-of-way to build a fiber network between Houston and Washington, DC.