Columbia Gas May Head For Chapter 11

Columbia Gas System, the $2.4 billion natural-gas distributor, is threatening to file for Chapter 11 protection unless gas producers agree to renegotiate old contracts. The cash-strapped Wilmington, (Del.) company warned on June 19 that it may be forced to write off up to $1 billion in the second quarter. The reason: losses from old pacts with producers at prices far above today's depressed market levels. Tied to these high-priced contracts, Columbia is finding few takers for gas it has to sell for nearly twice the going rate. The write-off could jeopardize the company's credit lines. To conserve cash, Columbia has suspended the dividend on its common stock.

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