Vivendi cash worries continue
Music Industry News - as it happens
Source: Mi2N - August 15, 2002
Despite an announcement from Vivendi Universal's board Of directors of a
plan to set up a euro credit facility with the company's banking partners,
its stock - already down 80% so far this year - hit 8.94 euros, "the lowest
level since the former water company was transformed into a global media
empire in the 1990s," as an August 15 Reuters report out it, continuing,
"The stock had stabilized at 10.60 euros, 11 percent down, by 11 a.m. EDT.
"Crushed by 19 billion euros ($18.6 billion) of debt, heavy losses and
battling to streamline disparate assets, the world's second largest media
group has seen credit ratings cut to 'junk' as it attempts to refinance 5.6
billion euros by next March.
"The credit crunch has placed the company in the hands of its banks and some
analysts estimate that Vivendi, whose assets include Universal Studios and
record labels boasting artists like U2 and Eminem, will run out of cash by
end-September if bankers fail to extend a 2.0 billion euro credit line."
In the meanwhile, in an August 13 statement the company said:
"Based on the proposal by the Chairman and Chief Executive Officer, the
Board approved the initial decision taken on the plan to dispose of at least
10 billion euros worth of assets, including 5 billion euros in the next nine
months. The Board voted to sell Houghton Mifflin and has entrusted the
Chairman to carry out this plan. On September 25, the Board will review in
detail the company's strategy to optimize all of its assets.
"The Board authorized the cancellation of 20,865,167 treasury shares linked
to certain stock option plans. A call option program will be put in place in
order to cover potential option exercises.
"The Chairman and Chief Executive Officer presented the Board with new
management principles for the organization of the holding company, Vivendi
Universal group, and announced the appointment of a new Chief Operating
Officer, Jean-Bernard Lévy. Eric Licoys accepted to continue heading certain
strategic dossiers for the company in the position of advisor to the
Related News from Mi2N:
» Vivendi Universal Reports First Half 2002 Results
» Vivendi Universal Issues Update On Company's Refinancing Needs