Within hours of parking his posterior in the chairman’s hotseat at Vivendi Universal, Jean-René Fourtou faced the unsavoury task of admitting what his ousted predecessor Jean-Marie Messier had vigorously denied for weeks: that the ailing Franco-US media giant is facing a serious cash crisis.

Having digested a detailed liquidity statement issued by Vivendi late Wednesday, credit analysts estimate that the group could face a cash shortfall of €2.7 billion ($2.63bn; £1.73bn) by the end of the year, expanding to as much as €5.5 billion by the middle of 2003, unless it can quickly secure a new multibillion-euro credit line from its lenders

But a cash crunch is far more imminent than the statement suggests. Vivendi must repay €1.8 billion to lenders by the end of July, and intends to fund the payment from €2.4 billion in existing cash and credit lines. The company also has a €3.8 billion credit line that will roll over in July unless its bankers refuse to let it do so.

Among Fourtou’s other first acts as chairman was the appointment to Vivendi’s board of an old friend, Claude Bebear, the founder and chairman of French insurance giant AXA and a vociferous critic of Messier. Bebear is joined on the board by a second newcomer – one with arguably even greater clout – Gerard Kleisterlee, chairman/ceo of Philips Electronics, whose firm holds a 3.5% stake in Vivendi.

Meantime, it has emerged that Messier apparently read the writing on the wall and held back at Wednesday’s fateful board meeting from pushing his reported €8m severance package to a vote. “Several French board members went into the meeting with the firm intention of not giving Messier anything at all,” said an insider.

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