Vivendi Universal, the indebted French media conglomerate, is set to receive a fillip in the shape of a E2.5 billion advance. This should satisfy creditors in the near future although the company’s long term prospects remain uncertain, according to a report in yesterday’s Observer newspaper.
It is believed that a consortium of banks including BNP Paribas, Citigroup and Credit Lyonnais are providing a credit facility that will enable Vivendi to meet its imminent loan commitments. The firm must pay off E1.8 billion of its overall E16.7 billion debt by the end of the month and credit rating agencies have already downgraded Vivendi’s bonds to junk status (see
Vivendi Launches Debt Relief Strategy).
The seriousness of the situation was emphasised last week when the company’s founder, Jean-Marie Messier resigned and the chief financial officer, Guillaume Hannezo, has offered to follow suit. In addition, France’s stock market watchdog has opened an inquiry into the media group’s accounts amid accusations of irregularity.
Vivendi, which has interests on both sides of the Atlantic, reached a provisional deal with its banks last week over an initial loan of E1 billion. However, analysts are still expecting the organisation to be broken up and the telecoms operator, Cagetel and the French film studio, Canal Plus could be among the first assets to be sold off.
Jean-René Fourtou, Vivendi’s new chief executive, is expected to outline the company’s disposal plans in the coming months.
