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Viv U gets breather

Company delays bond payment, CEO payout

NEW YORK — There’s rarely a dull day at Vivendi Universal, and Tuesday was no exception as the company scored some financial and political points in its efforts to keep creditors and irate shareholders at bay.

Vivendi U bought some financial breathing room by extending a bond payment, while also winning a reprieve in its contested obligation to pay former topper Jean-Marie Messier his S20 million ($22.57 million) severance.

Debt-holders Tuesday agreed to delay redemption of some $594.76 million in convertible bonds that could have been redeemed next March. Bondholders approved a higher redemption price in exchange for delaying their right to cash in early. Holders now will get $105.24 at the maturity date of March 1, 2006.

That two-year grace period, in addition to a $146.7 million repayment by Veolia Environnement, should improve Vivendi U’s financing capacity.

Comfort zone

Vivendi U brass has insisted all along that its liquidity position is not so dire that it would be forced into a fire-sale price for Vivendi Universal Entertainment. Company confirmed Tuesday that it will be able to meet its 2004 cash commitments “no matter which decisions are taken shortly on the full or partial disposal of Vivendi Universal Entertainment.”

Meanwhile, in round three of the battle of the Messier golden parachute, Vivendi U on Tuesday said that it was authorized by a Paris Commercial Court to freeze the disputed $22.57 million payment to ousted chair-CEO Messier.

In late June, a New York arbitration tribunal ruled that under terms of Messier’s U.S. employment contract, Vivendi U was obliged to pay the exec his umbrella. Two weeks later, Vivendi U scored its own victory in a Paris court, which froze Messier’s payout until such time as company shareholders could vote on the issue.

Legal experts contend that the U.S. should have jurisdiction in the matter, and Vivendi U has filed an appeal against the tribunal decision.

Pursuing pair

Perhaps in anticipation of failing to overturn the New York ruling, Vivendi U will fast-track a lawsuit against Messier and former chief operating officer Eric Licoys in the same commercial court “for payment of damages in the same amount as the severance indemnities and associated costs.” Licoys signed off on the Messier contract, which was drafted in July 2002 shortly before the freewheeling chief’s ouster.

Vivendi U insists that the board never formally approved the deal and that the contract is invalid in any case since Messier technically left the company voluntarily. Evidently there were no clauses in the contract that would have nullified the payout for cause.