The document discusses a presentation by group 2 of Shanto-Mariam University on Williams Companies. Williams is a Tulsa-based energy company experiencing a decline in its markets and credit rating due to Enron's collapse and regulatory inquiries. This has severely impacted its trading business and left it facing a liquidity crisis with large debt maturing. While the Lehman-Berkshire financing deal comes with restrictions and a high interest rate, accepting it would help resolve Williams' liquidity problems in the short term and allow the fundamentally strong company to emerge from its temporary difficulties.

1. Project- BBA-3106
Section –B
Instructor: Rubaiyat Shaimom
A presentation on
Williams Companies.
Group-02
Shanto-Mariam University of Creative Technology
No Name ID
1. Mahamudul Hassan 131-401-097
2. Romana Akter 131-401-119
3. Hridoy 131-401-135
4. Aminul Islam 131-401-143
5. Ahad Rahaman 142-404-001
6. Aduri bari mukta 131-401-117

2. Company Background
William is a Tulsa based company that is into the energy related
businesses including the exploration and production, pipelines, energy
trading and telecommunications. It is suffering from a decline in the
energy markets owing to the crash of Enron, pressure on margins in the
telecommunications business owing to oversupply and inquiries by the
regulators into alleged financial improprieties.

3. Problem Statement
The decline in the credit rating has hampered Williams ability to
raise cash from the market. This is expected to severely affect its
energy marketing and trading business which is highly dependent
upon the ability to obtain the available credit in the market. Hence
with a loss of rating and with a large amount of maturing debt,
Williams is facing an imminent liquidity crisis and proposed of
financing from Lehman-Berkshire Hathaway deal pondered whether
it was worth it.

4. Strength:
a) Able to largest supply energy-related commodities.
b) Maintain two types of business, telecommunication and energy related
commodity. If One is fall other can make profit.
Weakness:
A) Financial crisis.
B) Unable to maintain liquidity.
C) Aggressive program of asset sales.
SWOT Analysis

5. a) Rebalancing financial leverage position through the new issue.
b) Publicly traded stocks would be a more effective tool for use in
acquisitions.
a) Competitors.
b) Fall down of stock price.
.

6. Year 1998 1999 2000 2001 2002
Revenue 7452 8593 10110 11035 4414
Net Income after
extraordinary
120 219 524 (478) (318)
Total asset 18647 25289 40197 39906 37566
Market Value of equity 13341 13287 17573 13152 1524
Total liability 14390 19528 34115 32862 31947
Financial Statement

7. Term of Financial proposal
Period 0 1 2 3 4
Principal $ -900
Interest $ 52.20 $ 52.20 $ 52.20 $ 52.20
Additional interest $ 126.00
Deferred setup fee $ 135.00
Loan IRR (per quarter) 11.88%
Loan IRR (per year) 47.51%
a) Maintain interest coverage ratio of greater that 1.5 to 1.This ratio
is often used by the credit rating agencies to measure the default
risks associated with various firms and industries.
b) Limit capital expenditures in excess of $300 million.
c) Maintain parent liquidity to a certain level and give assurance of
the transfer of the securitized assets (capital stock and assets of
RMT) if the parent company is bankrupt.

8. Finding :
The financing was not cheap and had a lot of condition and restriction.

9. We believe that Williams is a sound company which if facing liquidity crunch
owing to an unexpected cash flow problem. As the fundamentals of the firm
are still strong hence we envisage that the firm can emerge victorious from
this temporary handicap. The approaches that the company has taken (i.e.
reducing expenses, releasing assets, reducing leverage ratio) will bring a
serene impact in the years to come. However the firm needs to tackle the
liquidity problem.
Therefore we believe that Williams will need to accept Lehman Brothers, Inc
and Berkshire Hathaway's credit agreement to help the company resolve the
liquidity problem. Accepting this agreement, will help alleviate the debt and
cash flow burden. Even though the terms of the agreement are not highly
salutary but given the unwanted alternative of possible bankruptcy, we still
believe that for the time being would be a viable and plausible course of
action for Williams.