Moody's turns the screw on Vivendi

VIVENDI Universal faces a further severe downgrade of its credit ratings if it does not 'succeed in addressing its short-term liquidity problem comprehensively in the very near time', Moody's has warned. Last week the agency slashed Vivendi's rating from Baa3 to a junk rating of Ba1.

The warning increases pressure on Vivendi's board, which last week ousted chief executive Jean-Marie Messier, to come up swiftly with sales of some of its more attractive assets.

Options open to new chief executive Jean-René Fourtou include selling more shares in subsidiary Vivendi Environnement, or selling the group's 44% stake in Cegetel to Vodafone to give the UK group control of France's second mobile phone network SFR. It could also unload broadcaster Canal Plus, or sell Telepiu, the Italian pay-TV business, to Rupert Murdoch.

Vivendi is struggling under almost e17bn (£11bn) of debt after Messier's spending spree and is in danger of breaching some of its banking covenants.