The financial woes of Vivendi Universal show no sign of respite with reports that the embattled media giant will post a €10 billion ($9.78bn; €6.39bn) write-down on the value of its assets for the second quarter.

This would be the second major write-off in as many quarters, after Vivendi was dragged down to a €17 billion Q1 loss by a €17.06bn hit, largely a reflection of the declining value of broadcaster Canal Plus Group.

The expected Q2 write-down – prompted by the falling value of its USA Networks business, its internet and telecoms units and Canal Plus for the second time – would pull Vivendi deep into the red again, despite robust operating earnings.

Its financial problems do not stop there. Vivendi may also have to declare in full the threat to its bottom line posed by off-balance-sheet liabilities. The media giant’s accounts are being examined by French stock market watchdog COB [WAMN: 10-Jul-02] to ensure that such agreements have been appropriately accounted.

Although the existence of these liabilities – including put options and agreed future payments – was revealed in the 2001 annual report, the potential extra cumulative debt has not been disclosed.

Analysts’ guesstimates of their impact vary considerably, ranging from €2.5bn to €8bn. Such added debt could severely hinder Vivendi’s efforts to avoid a cash crisis.

All may or may not be revealed Wednesday, when Vivendi plans to announce its second-quarter earnings.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff