Williams – a Tulsa Based CompanyJoin now to read essay Williams – a Tulsa Based CompanyNational University of SingaporeNUS Business SchoolBMA5312 Advance Corporate FinanceCase Analysis: WilliamsSubmitted By:Bansal, Ankur HT065019MKaushik, Anshuman HT065025RLucman, Christian AdeHT065048BPlange, VictorNT070696JVardrup, KasperNT070681EINTRODUCTION: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.
Oversupply in the telecommunications business has led to a decline in profits and margins in the industry forcing many players to back out of this sector. This goaded the Williams enterprise to guarantee an indirect credit support for $1.4 billion of WCG’s debt. At the same time, the deterioration of the energy industry resulted in more stringent requirements for the credit rating of investment grade companies. In response to those requirements, Williams initiated, at the end of 2001, a number of initiatives to “bolster its balance sheet” in order to maintain the company’s investment grade credit rating. These initiatives included large asset-sales (to be used to reduce outstanding debt), reduction of capital expenditures
, and increased liquidity. The combined effect of these actions was a drastic increase in the financial stability of WCG operations. As of Q2 of 2001, the company had received $3.6 billion in cash reserves.
For information on this particular report, please click here. For more information about the U.S. Department of Justice’s case law investigation of U.S. telecom companies in connection with the financial crisis of 2008-2009, see the complaint filed this year filed by the Attorney General’s Office in response to a complaint filed by the Consumer Product Safety Commission (CPSC) in the U.S. District Court for the Eastern District of Florida (U.S. District Court, Tampa, FL).
The CSCP has received numerous reports that have provided a positive view towards the utility industry. One of them, from the Center for Media and Democracy Research and The Atlantic, is, in fact, a study conducted by a variety of organizations and by a respected academic, which has been cited within the industry by the D.C. Commission on Human Rights and Public Interest. The study examined the data collected over the course of the “Flash Crash” in which the largest public utility owned utilities and power companies in the United States suffered losses of hundreds of billions of dollars after a massive bailout of utility companies that were being paid by their creditors.
In short, the CSCP finds that the number of companies who have suffered losses from the 2008 meltdown was unprecedented, and the decline is not only the result of an unprecedented financial crisis, but also the end of a long period of decline in financial security. The report points out that despite the efforts by regulators in the U.S. and other countries around the world, and despite the continued growth and expansion of utility investment-grade energy products, the American financial system continues to provide inadequate resources to address the country’s growing population, population aging, and the long-standing challenges of the global economy. Moreover, to maintain the company-owned quality of investments, it was not necessary that the financial district (SC) conduct public reviews when determining whether significant investment grade issuers were still available. Further, the report points out that when these large public investment grade companies were not present in a meaningful way, the CSCP could not have concluded that there were any significant losses that could have been avoided otherwise.
As it turns out, after more than two years of the recent wave of consolidation, the number of publicly traded companies is growing at an alarming rate. The average retail electricity bill in November was $17,600, up nearly 1,800 percent over the preceding three years. The annual bill for gas and electricity was approximately $11,120, up 496 percent over 2012, and for wholesale electricity was $44,610, nearly 40 percent increase over 2012. The market for new nuclear generating