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Vivendi cuts energy stake

Sithe sale to reduce company's debt by $3.6 bil

PARIS — Vivendi chief Jean-Marie Messier moved a step closer to his goal of a company focused on media and telecommunications with the announcement Sunday of the $680 million sale of part of its energy operations in the United States to the American Peco Energy Co.

Vivendi said the sale of 49.9% of subsidiary Sithe North America would reduce the group’s debt by almost $3.6 billion. But the French press noted that while the sale was a good deal for the Vivendi holding company, it would have no impact on the $10.2 billion owed by its heavily indebted water, energy, cleaning and transport subsidiary, Vivendi Environnement. Vivendi split its communications activities and environmental operations last month.

Once the Peco contract has gone through, Vivendi will no longer be Sithe’s main shareholder as its stake will be cut to about 30%.

Taking into account an earlier sale of 40 power plants to the U.S. group Reliant, Vivendi estimated that capital gains linked to Sithe for the year would be about $136 million.

Vivendi created Sithe Energies in 1984, when the group was still known as Companie Generale des Eaux. Sithe Energies, headquartered in New York, has a substantial portfolio of power plants. Sithe North America owns and operates 27, with an additional 11 being development.

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