Vivendi reports widening losses
PARIS (AP) – Vivendi Universal’s losses widened in the third quarter, even as the French media conglomerate said Tuesday that progress was being made in reducing its massive debt. The company also said it had obtained more than $2 billion in new and extended loans and credit, and was finalizing $1.3 billion in debt financing to acquire the part of Cegetel it doesn’t already own. Vivendi said it lost $1.23 billion, or $1.13 per share in the three months ending Sept. 30, compared with $960 million, or 92 cents per share, at the same time a year ago. During the first nine months of the year, the company lost $13.54 billion, or $12.45 per share, compared with $938 million or 89 cents per share.
Revenues for the conglomerate’s music and publishing businesses were hard-hit in the third quarter.
, but the damage was limited by a strong performance from Cegetel, which is 44 percent owned by Vivendi.
Vivendi and U.K. mobile-phone giant Vodafone Group PLC have been feuding for weeks as each seeks to secure control of Cegetel, France’s second largest telecommunications company, and its cash-generating mobile-phone unit SFR.
Vivendi has until Dec. 10 to decide on an offer for Cegetel made by Vodafone, or to offer its own proposal.
Still, Vivendi was confident about the future, saying its net debt fell in the third quarter to $18.6 billion from $18.8 billion at the end of June. The company said it expected the figure, which does not include the company’s stake in Vivendi Environnement, to fall to $13.9 billion by the end of the year.
Vivendi is in the process of selling its 40.4 percent position in Vivendi Environnement as part of a broader sales of assets to unload debt left from a spending spree by former chairman Jean-Marie Messier.
“Our disposal program has made very good progress,” current chairman Jean-Rene Fourtou said. “The company is … pursuing with determination its target of creating value for all its shareholders.”
Vivendi Universal has been on a selling campaign since July as a debt crisis has sent share prices tumbling. Its stock has plummeted 75 percent since the beginning of the year, though it finished in Paris on Tuesday up 3.38 percent, at 15.30 euros ($15.17) per share. Its U.S. shares rose 38 cents to $15.08 in afternoon trading on the New York Stock Exchange.
The conglomerate has sold holdings such as its Italian digital television arm and the U.S. publisher Houghton Mifflin. On Sunday, the company said it completed the sale of a 20.4 percent stake in Vivendi Environnement for $1.86 billion. And the company expects to close six or seven deals next month worth $7 billion.
Also Tuesday, Vivendi said it had arranged an extension of a $1.62 billion loan for its Vivendi Universal Entertainment unit and it had signed a $1 billion dollar backup credit line, of which half will mature at the end of next year and the remainder at the end of 2004.
The company also confirmed it’s in the process of finalizing $1.3 billion in debt financing for a Cegetel acquisition. The bank loans will mature in June 2010.
In a conference call with analysts and reporters, the company said it will sell $3 billion in entertainment assets next year, including the Canal Plus assets earmarked for sale earlier this year.
The company still has yet to decide on the disposal of other entertainment assets such as its U.S. entertainment holdings, which last week American billionaire Marvin Davis bid $15 billion for.
“Do I think that within two years’ time, U.S. media assets will still be within the group, I don’t know,” Vivendi chief financial officer Jacques Espinasse said. “We have an obligation to look at all the offers we get and present them to the board.”
The company said it expects its asset disposals to boost available cash to $4.5 billion at year-end.