Vivendi Universal confirmed today (July 10) that it has obtained a Euros 1bn unsecured credit line from a group of international banks. But there are more problems for the group as the stockmarket opened a preliminary investigation into its accounting practices.
The widely expected credit move is likely to be followed by a further loan exceeding Euros 2bn from another banking consortium. Both loans will help tide the company over while it "works with its banks on putting in place a refinancing to address the company's longer term financing requirements." It needs to repay loans of Euros 1.8bn by the end of this month.
Jean-Rene Fourtou, the newly installed chairman and CEO of Vivendi Universal, said: 'I am very pleased that we have secured this additional liquidity and that we are also working constructively with our banks on a longer term financing facility for Vivendi Universal. Speaking on television yesterday Michel Prada, chairman of the stockmarket watchdog COB, said the decision to investigate was "quite normal." He did not give details but said it carries out 90 such investigations each year to verify the "pertinence" and "coherence" of information that companies provide.
The investigation follows a report in Le Monde last week suggesting that Vivendi sought unsuccessfully to inflate its 2001 accounts by Euros 1.5bn following its sale of a stake in British Sky Broadcasting. Vivendi Universal has denied any wrongdoing.