Vivendi slides on debt inaction

Messier: Investors have criticised his handling of the media giant

PARIS, France -- Shares in Vivendi Universal tumbled on Thursday after a marathon board meeting failed to produce an action plan to cut debt at the world's second biggest media group.

Vivendi (PEX) shares fell more than 4 percent in Paris on news the board would form a new committee to oversee the debt-ridden group. But the board, meeting behind closed doors in New York, provided few details on how it would deal with its financial problems.

Investors had expected the board to announce plans to sell assets in an effort to reduce its 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.

Jean Marie Messier, Vivendi's embattled chairman and chief executive, has been developing a new strategy for the group -- one that would include the partial sale of Vivendi Environnement, France's largest water and sewage company, along with other assets.

After Wednesday's meeting the board did not provide specifics on the plan other than to say the strategy "is based on the active continuation of the debt reduction programme and the internal growth of the company's businesses."

Analyst said those comments would not satisfy investors who have been looking for concrete solutions to stem the company's losses.

"The board's answers did not meet the markets's questions, which go beyond debt issues and deal with the redefinition of the groups strategy and the means to implement it," Jean-Noel Vieille, a strategist at Aurel Leven, told Reuters.

However, the board did decide not to hold a new shareholders meeting despite charges of vote tampering at last month's annual general meeting in Paris.

At that meeting, Messier came under fire for not delivering a clear picture of his plans for the group, which posted a 13.6 billion euro net loss in 2001.

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 is the parent of CNN.

Part of his buying spree included the purchase of Canada's Seagram, which includes assets like Universal Studios and Universal Music, and French pay-television and film group Canal Plus.

Vivendi shares were down 3.9 percent to 32.42 euros in midday trading on Thursday.