Williams Suspends Quarterly Dividends

Williams Communications Inc. said it was suspending quarterly stock dividend payments to cut expenses and was delaying some interest payments for 30 days.

Ernst & Young, the company’s auditor, warned that if Williams is unable to restructure its balance sheet, lenders may take steps that could disrupt the telecommunications company’s ability to continue as a going concern.

Ernst based its opinion statement on a notice filed by Williams’ lenders that the company may be in default under the terms of its credit facility. Williams, which has been exploring the possibility of seeking Chapter 11 bankruptcy protection, plans to take advantage of a 30-day grace period for interest payments of about $91 million that were due Monday.