By the OGJ Online Staff
HOUSTON, Jan. 30 -- Shares of pipeline operator and energy trader Williams Cos. Inc. recovered some Wednesday afternoon after the company said it was committed to maintaining an investment grade credit rating.
The shares were down 3.9% to $18.05 in heavy trading, after being halted at $16.15, a 14% decline earlier in the day. Williams called the decline an "overreaction" to Tuesday's announcement the company was delaying an earnings report, while it reassessed $2.2 billion in guarantees to its former unit Williams Telecommunications Group Inc.
CEO Steve Malcolm said all relevant facts surrounding Williams's 2001 spin-off the communications unit, including all items related to contingent financial obligations, were properly accounted for and disclosed in filings with the US Securities and Exchange Commission. Investors have become particularly sensitive about contingent liabilities, after a credit downgrade accelerated debt at Enron Corp. and helped speed the Houston energy trader's collapse.
"Other than our internal assessment of whether we will ever have to perform on our Williams Communications contingent obligations, there are no issues, accounting or otherwise, that prompted the delay of releasing final 2001 earnings on Tuesday," he said. "These measures give us the capability, if required, to satisfy our contingent obligations of up to $2.2 billion related to Williams Communications."
Malcolm said in addition to the record earnings that are expected for 2001, Williams currently has $1.2 billion cash on hand, $1.1 billion of commercial paper availability fully backed by banks, and $700 million of available multiyear revolving-credit facilities.