Vivendi Board Weighs New Strategy For Business Recast

Paris, September 25: | Updated: Sep 26 2002, 05:30am hrs
Debt-crushed Vivendi Universal was poised on Wednesday to relaunch itself as a pure media and telecoms group as its board prepares to loosen ties with the 150-year-old utilities business from which it grew.

Plotting out the final episodes in a drama which led to the downfall of empire-building chairman Jean-Marie Messier in July, the board will ponder a rescue strategy forged by new CEO Jean-Rene Fourtou for the worlds second largest media group.

Faced with a staggering 20 billion euro ($19.65 billion) debt, Mr Fourtou will try to bury Mr Messiers legacy of overexpansion and appease the banks which dragged Vivendi back from the brink of collapse by refocusing on media content and cash-generating telecoms interests in France, sources close to the company said.

In a statement before the market opened, Vivendi said its Canal Plus pay-television division had sold its 89 per cent stake in its technology unit to French consumer electronics company Thomson Multimedia for 190 million euros in cash.

Shares in Vivendi, which had already said it plans to refocus Canal Plus on cable and satellite TV before selling new shares in it next year, opened slightly weaker before flitting higher to stand up 1.50 per cent at 12.15 euros.

The market had largely anticipated this sale and its really a drop of water in the ocean for Vivendi. Everybodys waiting for the big sweep out later today, one trader said.

The stock, which has tumbled 80 per cent since the start of the year, remained jittery ahead of a news conference in Paris where further asset sales are expected to be announced.

Mr Fourtou, who had ruled out the sale of Vivendis 41 per cent stake in utility arm Vivendi Environnement when he took power in July, now looks set to surrender the stake to help raise cash. But he is seen likely to keep prize media assets such as Universal films and music, which Mr Messier bought from the Seagram drinks empire at the height of the new economy boom in 2000.