Shares in the water-utility-turned-media-giant were up 3.7% at $17.90 Monday afternoon, following a company announcement that it expected to solve its cash-crunch problems soon, along with an indication of third-party interest in a transaction that could help deleverage the company.
That news countered a follow-up report from debt ratings company Moody's Investors Service, which said Sunday that Vivendi Universal had best solve its short-term liquidity problem "in the very near term" or face further debt downgrades.
Moody's last week cut Vivendi's rating to junk status. Vivendi Universal last week named Jean-Rene Fourtou chairman and CEO to replace Jean-Marie Messier, on whose watch Vivendi's shares had plunged since the beginning of the year.
Vivendi Universal acknowledged last Wednesday that it had a "short-term liquidity issue." The company said it had payments of about 1.8 billion euros due by the end of July, which it could pay off from resources totaling 2.4 billion euros in cash and drawdowns on existing credit facilities.
The company added that 3.8 billion euros' worth of credit lines subject to "standard material adverse change provisions" were scheduled to roll over in July.
In its weekend follow-up to last week's downgrade, Moody's says that its new Ba1 junk rating, which is under review for a further possible downgrade, assumes that Vivendi Universal will be successful in resolving its near-term liquidity issue soon, in such a manner that it gives new management time to sell additional assets and restructure its liabilities. "Time is of the essence," says Moody's in its statement.
In response, Vivendi Universal said Monday morning that it is in "active negotiations with its main credit banks" to address the near-term problem. Adds Vivendi Universal, "The company expects to conclude an agreement very shortly."
Meanwhile, this week's issue of the French magazine
, reports Dow Jones, contains comments from Patrick Le Lay, chairman of French broadcaster Television Francaise 1, expressing interest in purchasing assets of Vivendi Universal's Canal Plus.