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Vivendi posts $1.2 billion loss
PARIS, France -- Vivendi Universal, the world's second largest media group, said on Tuesday its losses widened as it sold assets to cut debt. Vivendi's net loss was 1.23 billion euros, or 1.13 euros, in the third quarter, compared with a loss of 960 million euros, or 0.92 euros, in the same period last year. Third-quarter operating profit came in at 1.2 billion euros ($1.1 billion), up 25 percent from a year earlier but below analysts forecast for earnings before interest and tax of 1.4 billion euros. Vivendi (PEX) shares were up 4.7 percent to 15.50 euros in early afternoon trading on Tuesday in Paris. Chief Executive Jean-Rene Fourtou has sought to sell businesses to reduce the group's 19 billion euro debt, which was racked up by ousted CEO Jean-Marie Messier following a two-year buying spree in Europe and North America. In September, Fourtou announced plans to auction assets valued at 12 billion euros by the end of 2003.
"Our disposal programme has made very good progress," Fourtou said in a statement on Tuesday. "By the end of 2002, we are expecting to have sold assets worth approximately 7 billion euros." Fourtou added the company's objective was to reduce debt and "improve the profitability of the businesses." On Sunday, Vivendi said it had raised 1.9 billion euros after selling half of its 40.8 percent stake in water and waste utility Vivendi Environnement to French state power firm EdF and a group of banks. Vivendi has also sold its U.S. educational book unit, Houghton Mifflin, for 1.7 billion euros ($1.7 billion) -- about 500 million euros less than what it originally paid for it -- to Thomas H. Lee Partners and Bain Capital Inc. Last month, the group raised 1.25 billion euros from the sale of its non-U.S. publishing assets. The recent deals should provide Vivendi with the needed cash to battle Vodafone, Europe's biggest mobile phone operator, for control of their profitable venture Cegetel, which also runs France's second largest mobile network SFR. Vivendi, the second largest media company after CNN's parent AOL Time Warner, has 44 percent stake in Cegetel and Vodafone has a 15 percent share. Vivendi has rejected a 6.77 billion euro offer from Vodafone for its stake in Cegetel and has until December 10 to match Vodafone's 4 billion euro bid for BT Group's 26 percent holding. Both groups are anxious to hold on to cash generating Cegetel. On Tuesday, Vivendi said operating income from Cegetel rose 64 percent to 460 million euros in the third quarter.
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