Vivendi breathing space on debt

DEBT-LADEN French-American media conglomerate Vivendi Universal today secured a six-month breathing space in which to cut its e19bn (£12bn) debts through disposals.

Vivendi Universal shares rallied 5.22% to e13.90 after it secured a new credit line of e2.94bn from an 11-bank syndicate that includes Royal Bank of Scotland.

The group is also in final talks to sell Italian pay-TV group Telepiu to Rupert Murdoch's News Corp for about e1bn.

The deal would be a coup for Murdoch, who has suffered heavy losses in the Italian satellite TV market. He would be able to merge Telepiu with its loss-making rival Stream, which he already owns, and cut costs. After months of wrangling, he has got about e500m knocked off.

The Telepiu deal will be helped by the late return of Italian football, whose clubs were unable to reach a deal on broadcast rights, resulting in a two-week delay to the start of the season.

Vivendi is also reported to have received an approach for its 50% stake in Polish mobile phone company Elektrim, valuing that business at e1bn.

Jean-René Fourtou, the onetime chemical company boss parachuted in at the beginning of July to rescue Vivendi after the departure of creator, Jean-Marie Messier, is making progress.

The dapper 62-year-old plans to unveil a new strategy for the group, which had revenues of e46bn last year, at next Wednesday's board meeting. He will also sell e10bn of assets. Bids for novels-to-schoolbooks subsidiary Vivendi Universal Publishing, which had operating profits of e448m last year, are due to be filed by Monday. The business should raise at least e3bn. He is understood to be contemplating a Nasdaq flotation of VU's video games business next spring to raise upto e2.5bn.

Fourtou has already offloaded joint-venture internet portal Vizzavi to partner Vodafone for e142m. With French politicians keen to ensure he does not sell the country's cultural icons, he is likely to hang on to Universal Studios, TV station Canal Plus and the rest of Vivendi's TV and music interests.

That leaves him with a choice of two big, profitable businesses to dispose of. Telephone company Cegetel controls mobile phone network SFR, which has operating profits of e2bn a year. Vodafone, which owns 15% of Cegetel and 20% of SFR, is keen to buy out Vivendi.

But Fourtou is thought to favour selling his 40% interest in utility business Vivendi Environnement, which has similar profits, and using the cash to buy full control of the phone companies.