Vivendi Universal's new chief executive Jean-René Fourtou, on Sunday published an open letter to staff and investors, stressing his confidence that he can bring stability to the debt-beset group.
The letter was issued just four days after Fortou unveiled a massive first half loss of €12.3 billion €12.3bn ($12.1bn; £7.9bn), triggering a freefall in Vivendi’s stock price to an alltime low of €9.30.
In his letter, Fortuou spelled out three strategic options for the Franco-American media giant:
• "Pursue the creation of an international media group but with what strategy?"
• "Become a majority shareholder in Cégetel [the French mobile operator] but how?"
• "Return to being a majority shareholder in Vivendi Environnement, which is a world leader in these activities, but with what aims?"
All these options were possible, he added, albeit “not at the same time”. Nor were the choices strictly complementary. Therefore: “One will have to hive off certain businesses to have the financial flexibility to pursue the others”.
Accordingly, Fourtou's aim is to “pursue the plan which has the best chance of creating shareholder value”. He did not reveal what plan this would be.
An essential part of lowering group debt is the sale of US publisher Houghton Mifflin, Fourtou confirmed. But, according to the Financial Times, he aims to retain Vivendi’s other publishing assets – an intention refuted by a separate story in the Wall Street Journal.
Reports the latter: “In desperate need of cash, Vivendi Universal is considering selling piecemeal its entire publishing subsidiary [Vivendi Universal Publishing], which encompasses businesses ranging from French news magazines to educational publishers and videogame makers, people familiar with the matter said.”
Meantime, Fourtou revealed: “When I took over Vivendi on July 3, I found a business on the verge of default.” But the group has since secured €1bn in emergency credit lines to cover immediate servicing of debts, with a further €2bn “in the pipeline” to avoid a fire sale of valuable assets. This would be in place by the end of September.
Data sourced from: Financial Times and Wall Street Journal; additional content by WARC staff