Williams To Reinvest Approx. $1.7 Bln Into Williams Partners; Cuts Dividend

(RTTNews) - Williams (WMB) and Williams Partners announced immediate measures to strengthen their credit profile and fund the development of a significant portfolio of fee-based growth projects at Williams Partners. Williams intends to reinvest approximately $1.7 billion into Williams Partners through 2017, funded by reduced quarterly cash dividends. Williams plans to reinvest $500 million into Williams Partners in 2016 including $250 million in the third quarter via a private purchase of common units with the balance in the fourth quarter via the Distribution Reinvestment Program or DRIP. An additional $1.2 billion is planned to be reinvested in 2017 via the DRIP.

Williams expects the payment of a quarterly dividend of $0.20 per share to its common stockholders ($0.80 annually), reduced from its current quarterly level of $0.64 ($2.56 annually), beginning with the third quarter 2016 dividend payable in September 2016. This dividend level will allow Williams to annually retain approximately $1.3 billion that can be reinvested into Williams Partners.

The DRIP is expected to be activated in the third quarter of 2016 and available for the quarterly cash distribution that will be paid to limited partners in November of 2016.

Williams and Williams Partners expect to finalize the agreement on the sale of their Canadian business during the third quarter of 2016, with expected combined proceeds in excess of $1 billion, with Williams Partners' share in excess of $800 million.