The crisis at Vivendi Universal deepened yesterday when the French-American media giant announced first half losses of E12.3 billion. The firm has now embarked on a major asset disposal programme after admitting that it needs to raise at least E10 billion in the next two years.
Vivendi is reeling from the legacy of acquisitions made by former chief executive, Jean Marie Messier. Falling share prices have depressed the value of its television, publishing, mobile phone and film assets and led to Messier’s resignation last month (see
Vivendi Launches Debt Relief Strategy).
Although revenues increased by 8% to E30.6 billion in the first six months of 2002, the net loss before write-offs was E66 billion. The group now owes banks more than E19 million and Standard & Poors, the credit rating agency, has downgraded the debt to junk status.
“In the short-term, due to the structure of our debt, Vivendi is facing a liquidity problem despite the value of our assets,” said new chairman and chief executive, Jean-René Fourtou.
The break-up is expected to commence with the sale of the Italian pay-TV group Telepiù, and US publishing house Houghton Mifflin. The debt will also be reduced by curtailing the foreign operations of TV station Canal Plus, withdrawing investment from the Vizzavi internet portal and slashing corporate overheads.
