NEW YORK — Vivendi Universal is in the money — for now.
Company announced Wednesday that it’s nailed down a crucial $2.9 billion credit line that gives it needed financial flexibility and hits a high note heading into next week’s board meeting.
Now, the parent of Universal Studios and Universal Music can evaluate strategic options without creditors and ratings agencies breathing down its neck. The board is likely to lay out initial assets for sale and give some indication Sept. 25 of its longer-term thinking on U.S. entertainment, Vivendi Environment and Cegetel telecom. Chairman-CEO Jean-Rene Fourtou indicated to employees in New York last week that Vivendi won’t rush into a sale of the studio or music group.
Separately, Viv U said Cegetel chairman and Vivendi deputy chief operating officer Philippe Germond will leave at year’s end to become chief operating officer of French telecom equipment giant Alcatel.
Germond has headed Cegetel, France’s leading private telecommunications concern, since 1997. He worked closely with Viv U’s ousted chairman-CEO Jean-Marie Messier.
Vivendi shares closed up 1.59% in Paris at x13.42 ($13.12), after climbing as much as 9% during the session.
In New York, they traded up 5.35% to end at $13.56. The facility was a key step in Fourtou’s mission to repair investor confidence and boost the lagging stock, which was changing hands at near $60 in January.
Credit facility expanded
Viv U said the commitment from an international consortium of 11 banks replaces a previous x1 billion loan and expands the facility by another x2 billion.
Fourtou had promised to line up the financing by the end of September. He’s been negotiating various covenants with the diverse group of institutions nearly full time since he took Vivendi’s helm in early July in the midst of a severe cash crunch.
The funds will give the group operating capital for about six months as it lines up asset sales to pay down a hefty $19 billion in debt. Canal Plus Technologies will be sold to Thompson and Italian pay TV group Telepiu to News Corp. in a matter of days, people at the companies say. Initial bids on the giant publishing group, including Boston-based Houghton Mifflin, are due early next week.
Viv U execs were meeting with banks — including ABN Amro, BNP Paribas, CDC Ixis, Citigroup, Credit Agricole Indosuez, Credit Lyonnais, CS First Boston, Natexis Banque Populaires, Royal Bank of Scotland, Societe Generale and Sumitomo Mitsui Banking Corp. — on Wednesday to hash out final details of the credit line.