NYSE Boots Williams Comm

Williams Communications Group (NYSE: WCG) is getting the boot from the New York Stock Exchange (NYSE).

The NYSE announced today that it has suspended trading in the company’s stock, and that an application to have Williams removed from its list is pending with the Securities and Exchange Commission. The decision was based, among other things, on the abnormally low selling price of the company’s stock. Williams shares were trading at 13 cents at closing on Thursday, February 28.

The NYSE has not opened trading on the company’s stock since last Friday, when it issued a warning to the company that it might lose its listing status, due to the fact that its stock was trading below the exchange’s minimum share-price requirement of $1 over a 30-trading day period.

Williams has a right to appeal the decision, according to a statement issued by the NYSE today.

Williams shares have fallen drastically since it announced that its banks had warned of a possible default at the beginning of February. At the time, the company assured shareholders that it wasn’t planning to file for bankruptcy protection. Less than a month later, its balance sheet laden with about $5.16 billion in debt, the company’s shares plummeted further when it had to concede that it was indeed considering filing for chapter 11 (see Williams Ponders Bankruptcy). The company announced yesterday that discussions of its restructuring had been extended until March 27.

Williams’s financial woes have also become a burden for its former parent company Williams Communications Group (NYSE: WMB), which has been hit with $2.05 billion in charges related to guarantees it offered on the telecom company’s debt. Including these pre-tax charges, the energy trader and natural-gas pipeline operator today reported a 2001 audited consolidated net loss of $477.7 million, or 95 cents per share.

And that wasn’t the end of the bad news for both Williams Communications and Williams Cos. today. Lockridge Grindal Nauen PLLP announced today that a class action suit had been filed against the two companies on behalf of stockholders who had purchased shares between July 24, 2000, and January 29, 2002. The complaint charges that the companies violated the SEC Act of 1934 through a series of false and misleading statements regarding Williams Communications' financial situation issued to the market in press releases and public filings during the period in question. This resulted, the complaint alleges, in the price of Williams shares being artificially inflated. Several Williams directors and officers have also been included in the suit.

— Eugénie Larson, Reporter, Light Reading
http://www.lightreading.com