Vivendi Universal chairman Jean-Rene Fourtou announced that the company has
secured about $2 billion in financing and tried to quash rampant rumors about
the company's divestiture plans, claiming in a letter to shareholders issued
late Sunday that its Vivendi Universal Entertainment subsidiary is not on the
Fourtou said the new credit line would be arranged with seven major banks by
the end of September.
The new money -- with a $984 million bridge loan negotiated in July -- would
enable Vivendi to avoid quick sales of assets in order to keep up debt
repayments, Fourtou said.
The news gave a needed boost to Vivendi's American Depository Receipts, which
closed up 22 percent, or $2.17 each, at $11.93 Monday. Despite those gains, the
ADRs are down about 79 percent since the beginning of the year.
Fourtou, who replaced embattled chairman Jean-Marie Messier in July, had
announced an aggressive recapitalization plan earlier this month, including
selling off about $9.8 billion worth of Vivendi's nonstrategic assets.
But so far, the only asset Vivendi has identified for sale is its
Houghton-Mifflin Co. publishing division, which it purchased just last year for
about $2.2 billion in cash and assumed debt.
Fourtou also said on a conference call with analysts last week that Vivendi's
$1.5 billion stake in EchoStar Communications Corp. could be on the block.
While analysts and pundits have speculated on what other Vivendi assets could
be for sale, at the top of the list was its U.S.-based television and film unit,
VUE was formed last year with the purchase of the remaining interest Vivendi
didn't already own in cable channels USA Network, Sci Fi Channel and NewsWorld
International, as well as Universal Studios.
But in the letter to shareholders, Fourtou said the VUE unit was not for
sale. He added that speculation that Vivendi would sell its stakes in water
utility Vivendi and wireless phone company Cegetel; its 49 percent interest in a
restructured Canal Plus S.A.; Universal Music Group; or other parts of its
publishing unit were also untrue.
'There are still many obstacles in our way, but I am absolutely convinced we
will succeed,' Fourtou wrote.