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Vivendi Lays Out Debt-Reduction Goals

TSC Staff

Vivendi Universal(V Quote) again sought to soothe worried shareholders by saying it should be able to boost some key debt-coverage ratios by the end of the year through asset sales.

The transatlantic media conglomerate said it has a goal of paring its net debt to below 15 billion euros from about 17 billion euros at March 31. This would lower the company's debt-to-EBITDA ratio to an estimated 2.5, a lower level than it previously targeted and one that leaves the company "confident of its capacity to meet its anticipated obligations over the next 12 months." Vivendi cited asset sales that it said totaled 6 billion euros in the first half of 2002 and continuing progress unloading noncore properties.

Moreover, the company said it has roughly 3.3 billion euros of unused credit lines available to back up commercial paper outstanding of nearly 1 billion euros.

The company covered the debt-reduction strategy in a conference call designed to quell growing shareholder uneasiness with Vivendi's finances and the leadership of Chairman Jean-Marie Messier. The combination of WorldCom's troubles and Messier's recent survival of a no-confidence vote had weighed on the shares in the European session. In the past, disclosure of liquidity measures -- almost regardless of their merit -- has had the effect of spooking investors and causing selloffs.

But after the conference call the shares were up $1.53, or 7.73%, to $21.33 on the NYSE.