Vivendi 'clears water stake cut'

Messier: Investors have criticised his handling of the media giant

PARIS, France -- Vivendi Universal's board of directors has given chief executive Jean-Marie Messier approval to cut the company's stake in utility Vivendi Environnement, according to a press report.

Vivendi Universal, the world's second-largest media company, needs to cut debt and could sell a 20 percent stake in the water utility. That could reduce its stake to about 40 percent from 63 percent, daily La Tribune said on Friday.

Institutional investors could grab a slice and the rest of the stake may be sold on the market. A sale price of 34 euros per share would raise 2.3 billion euros ($2.1 billion) for debt-laden Vivendi Universal.

Its shares rose 4 percent to 33.25 euros in early Paris trading on Friday.

At the same time, Vivendi Environnement, France's largest water and sewage company, plans to raise more than 1 billion euros of additional funding through a possible sale of new shares, the papers said.

Vivendi Universal's stock slid more than 5 percent on Thursday after a marathon board meeting failed to produce an action plan to cut debt. But the board did agree to form a new committee to oversee Messier's running of the business.

Investors had expected the board to announce plans to sell assets in an effort to reduce its 17 billion euro debt and halt the slide in the company's stock, which has lost 45 percent of its value this year alone.

Messier has come 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.