Vivendi Chief Attempts To Allay Debt Concerns

The head of troubled media corporation, Vivendi Universal has sought to reassure investors after heavy share price falls in the second half of last week.

In an open letter to staff and shareholders, chief executive Jean-René Fourtou admitted that the company was in difficulty but claimed to have “identified a strategy for getting out of this crisis”.

Shares in Vivendi plunged almost 50% last week after it revealed losses of E12.3 billion for the first half of 2002. The media giant is already E19 billion in debt and is preparing to sell off a number of divisions starting with the American publishing business, Houghton Mifflin.

However, after analysis of the company’s financial situation, Fourtou is convinced that Vivendi will avoid defaulting on its debts. He claims to have secured a E1 billion loan and informed investors that “the value of our assets is considerably higher than our debt”.

Analysts are less confident and many predict that Vivendi will be forced to break up its US entertainment business which includes the Universal music and film enterprises.

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