Vivendi 'to wipe out $10 billion'

Fourtou: Preparing a strategy to sell Vivendi assets and cut debt

PARIS, France -- Vivendi Universal, the world's second-biggest media company, plans to slash the value of assets by as much as 10 billion euros ($9.78 billion) as the value of media stocks tumble, according to a report.

The company may also clarify the impact on its debt from off-balance sheet liabilities incurred by the aggressive acquisition spree of former chairman Jean-Marie Messier, the Wall Street Journal said on Tuesday.

Its second straight quarterly loss will offset what are expected to be solid operating profits from it various operations, which include a Hollywood studio, music group and mobile phone operator.

Vivendi (PEX) was forced to write down the value of assets in late April by 17.06 billion euros, under U.S. accounting standards, causing it to report a 17 billion euro first-quarter loss.

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A large part of the latest write-down is to take account of the depreciation in value of the USA Networks film and television businesses Messier bought for $10.3 billion, the paper said.

Vivendi may cut the value of its Internet and fixed-line telecom business and may further write down the value of Canal Plus Group ahead of the pay-TV unit's planned stock-market floatation in 2003, the paper added.

Messier spent billions on building up the empire to challenge the world's biggest media group, AOL Time Warner (AOL), which is the parent of CNN. Acquisitions included a $30 billion buyout of Canada's Seagram and a $10.3 billion purchase of USA Networks, a cable and entertainment company run by Hollywood mogul Barry Diller.

New Chief Executive Jean-Rene Fourtou has pledged to reduce the company's debt mountain of 19 billion euros, possibly by selling assets not critical to Vivendi's main business focus. That could include its video games unit, the Wall Street Journal said last week. (Full story).

Shares in the troubled Franco-American media giant, which have fallen about 75 percent this year, slipped 0.8 percent to 15.97 euros in early Paris trading on Tuesday.