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Vivendi outlines asset sale
PARIS, France -- Vivendi Universal announced a shake-up of its board on Wednesday and said it would sell assets worth 12 billion euros over the next 18 months. Chief Executive Jean-Rene Fourtou said the asset sale would be "very substantial" in order to turn around the financial troubled media giant. "We're here to discuss three areas, the liquidity crisis... our programme for asset disposal, which has to be very substantial, and decisions on strategy taken by the board of directors," Fourtou told a news conference in Paris. Fourtou's comment followed a special board meeting called to hammer out a new strategy plan for the debt-laden group.
Six board members resigned after the meeting -- including Alcatel chairman Serge Tchuruk, EDS chairman Richard Brown and Eric Licoys, a close associate of former Vivendi chief Jean-Marie Messier. Vivendi said in a statement that those members would not be replaced, and that their departure would reduce the board to a "more streamlined 12 members." As for its disposal of assets, the group said it planned to sell its Internet, press and publishing interests, including Vivendi Universal Publishing. However, the group provided few details in its statement on plans for its 44-percent stake in Cegetel, France's second-largest telecom group Cegetel, other than to say it was studying "every possible solution." Vodafone, Europe's biggest mobile phone company, which has a stake in Cegetel, is keen to increase its holding in the business and is currently in talks with BT Group, which owns 26 percent of Cegetel.
Concerning its 41-percent state in Vivendi Environnement, the group said it was continuing to examine "how the relationship between Vivendi Universal and Vivendi Environnement should develop." The group added that it would try to improve the value of its investment but would not sell shares in the utility on the open market. Fourtou said at least 5 billion euros worth of sales would be completed within the next nine months. That includes an agreement announced on Wednesday to sell its Italian television unit Telepiu to Rupert Murdoch's New Corp. The sale price was estimated at 1 billion euros. Also on Wednesday, Vivendi said it had sold Canal Plus Technologies -- the maker of encryption software for set-top boxes -- to Thomson Multimedia for 190 million euros in cash. Analysts had originally expected the sale to generate about 300 million euros. Vivendi had previously said it wanted to refocus Canal Plus on cable and satellite television operations in France. The group is now expected to keep its entertainment assets, which include Universal Music Group, movie studios Universal Studios and USA Network The world's second-largest media company, which ousted its former CEO Messier in a board room coup two months ago, is struggling with debts of about 19 billion euros racked up by Messier after a two-year multi-billion-euro spending spree to create a media group to rival AOL Time Warner. Vivendi (PEX) share price has fallen as much as 85 percent this year from a high of 64.40 euros and to a low of 8.62 euros in August. It was up 6 percent to 12.68 euros in mid-afternoon Paris trading on Wednesday. Vivendi has won a crucial 3 billion euro loan from a group of 11 banks, which gives it six months of "breathing space" to implement its strategy to reduce debt.
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