Vivendi Universal – the moment of truth

by Fabien Lemercier

24/09/2002 - The board of VU, French cinema's main source of funding, to meet and approve a wide-ranging re-organisation and sales programme to reduce debt and stay buoyant

The board of French media colossus Vivendi Universal (VU), the Gallic film industry’s main source of funds through its subsidiary company Canal+, is scheduled to meet in Paris tomorrow (25 September). Faced with debts of more than Euros 19 million and short-term liquidity problems, according to well-informed sources Fourtou must present a detailed plan confirming its future media development plans. After successfully avoiding a block of all payments, Jean-René Fourtou who replaced Jean-Marie Messier at the head of the group on 3 July, must now explain in detail how he intends proceeding with the sale of VU’s various activities; he promised creditor banks to come up with Euros 10 billionover 18 months, Euros5 billion of which over a nine-month period.
This summer, Vivendi Universal sold its mass market publications, Internet portal and the decoder company, Canal+technologies realising almost Euros 700 million. The sale of VU’s Italian subsidiary, Telepiù, to Rupert Murdoch’s News Corporation is also likely to be finalised. In addition, Jean-René Fourtou hopes to sell off all of Vivendi Universal Publishing (VUP) with the sole exception of videogames sector.
In France, VU has decided to re-center Canal Plus prior to re-quoting the company on the French stock exchange in 2003. The new Canal+ will include the encrypted network, the CanalSatellite TV bouquet, the network publishers Multithématiques and the StudioCanal production company.
Meanwhile in America, Jean-René Fourtou denied the group was planning on selling off Vivendi Universal Entertainment (VUE), that encompasses the Universal film studios and TV stations, USA Networks. According to an article published by the Wall Street Journal, the clauses make it extremely difficult for these activities to be sold off. However Barry Diller, president of VUE, does not share this opinion and would dearly like to recover his independence. A turbulent state of affairs that will contribute to a lively board meeting, and perhaps a few surprises.