Crunch time for Vivendi's Messier

Messier: Vivendi boss expected to present plan to cut media group's debt

PARIS, France (CNN) -- It is crunch time for embattled Vivendi Universal boss Jean-Marie Messier.

On Wednesday in New York, Messier will face off with board members in what is expected to be a make-or-break meeting that could decide his future and that of the debt-laden conglomerate he heads.

Messier is expected to present a survival plan to cut Vivendi's 17 billion euro ($15.6 billion) debt and halt the slide in the company's stock, which has lost 45 percent of its value this year alone. The company also posted a 13.6 billion euro net loss in 2001.

His plan is likely to include the partial sale of Vivendi Environnement, France's biggest water and sewage company, along with other assets. Environnement, which has seen its share price fall by one-third in the past 12 months -- has been a source of cash to help pay down the group's debt and fund acquisitions.

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"There is increasing pressure coming from the board to get something done," Stephanie Gerrard, a portfolio manager at Aberdeen Asset Management, told CNN.

But aside from presenting a new strategy, Messier will also be attempting to restore confidence in his leadership.

Messier, 45, joined Vivendi in 1994 when it was still called Compagnie Generale des Eaux. He transformed the company from primarily a utility concern into the world's second biggest media group, after AOL Time Warner (which owns CNN).

After winning much praise as a deal maker -- chalking up a string a acquisitions, including Canada's Seagram and French pay-TV and film company Canal Plus -- Messier has come under growing criticism for not delivering a clear picture of his plans for the expanded company.

Most recently, he came under fire for his sudden dismal of Canal Plus boss Pierre Lescure. Canal Plus is responsible for producing the majority of French films, and his handling of the matter prompted concerns over the unit's editorial independence as well as Messier's commitment to French culture.

Bronfman: Board member sold Seagram to Vivendi two years ago

The fact that Wednesday's board meeting is being held in New York -- from where Messier now runs the company -- and not in Paris has also unnerved some people, especially those in the entertainment industry who have accused Messier of selling out to Hollywood.

"Messier knows he can't afford to put a foot wrong now and is piecing together a wider strategy that will accelerate Vivendi's debt reduction plan and include the part sale of Vivendi Environnement,'' a source close to the company told Reuters.

The New York gathering -- called to decide whether to recall shareholders after charges of vote tampering at last month's annual general meeting in Paris -- brings together some of the world's biggest corporate heavyweights.

The 16-member board includes Edgar Bronfman Jr., whose family sold their controlling stake in Canada's Seagram -- which includes assets like Universal Studios and Universal Music -- to Vivendi 18 months ago.

There has been speculation that Bronfman and others might be mounting a takeover of Vivendi because of concerns over Messier handling of the group since the sale.

Also expected to attend the meeting is Jacques Friedmann, representing French insurance giant Axa, and Marc Vienot of the French bank Societe Generale. The board also includes Bernard Arnault, the chief executive of luxury goods maker LVMH Moet Hennessy Louis Vuitton and Serge Tchuruk, the head of French telecom equipment maker Alcatel.

While many board members have voiced criticism of Messier, few believe they will demand his resignation. "I think it's pretty unlikely," said Aberdeen's Gerrard.

Vivendi (PEX) shares were up 1.2 percent to 34.15 euros in midday Paris trading on Wednesday.