Vivendi slumps to new low

Messier: Needs to sell assets to pay off Vivendi's debt

PARIS, France -- Vivendi Universal, the world's second-largest media group, fell to five year low after selling shares in its water utility to Deutsche Bank in an effort to slash debt.

Its stocks (PEX) slumped more than 8 percent to 24.55 euros, its lowest since September 1996 after it sold 43.9 million shares, or 12.7 percent, of Vivendi Environnement. Vivendi's stock, which has dived more than 60 percent this year, recovered to 25.50 euros, down 4.3 percent in mid-morning trading.

Under the terms of the deal, Vivendi can buy back the stake at a future date. Based on Thursday's closing price of 33 euros, Vivendi raised about 1.4 billion euros.

Vivendi Chief Executive Jean-Marie Messier was forced to reduce the company's stake in Vivendi Environnement as he came under pressure to slash its ballooning debt, stop share price declines and reduce balance sheet losses.

Earlier this week, the company said it would cut its stake to slightly over 40 percent from the current 63 percent. It plans to sell another 15 percent, raising about 1.5 billion euros, as it battles to cut its media debt of as much as 20 billion euros.

MORE STORIES • Vivendi chief faces protests  • Vivendi posts $11.8B loss  • Focus on Vivendi as TV boss fired  • Messier: Threat to French culture?  • Vivendi sells TV stake to Telenor  • Murdoch in $1bn Vivendi deal  • $5 million bonus for Vivendi chief

Messier, once the rising star of the French corporate scene, has transformed Vivendi from primarily a utility concern into the world's second biggest media group, after AOL Time Warner, which is the parent of CNN.

But acquisitions have swelled Vivendi's media debts to above 30 billion euros when the debts of utility unit Vivendi Environnement are included.

Vivendi sold its 12 percent stake in the water utility to Deutsche Bank on June 12, and announced the deal on Thursday.