Financial pressure on Vivendi Universal, the group that controls Universal Pictures, Canal Plus and StudioCanal, is set to ease following a new agreement with banks and progress on asset sales.
The group has brokered a new Euros3bn medium term credit line from a consortium including ABN Amro, BNP Paribas, CDC Ixis, Citigroup, Credit Agricole Indosuez, Credit Lyonnais, Credit Suisse First Boston, Natexis Banques Populaires, Royal Bank of Scotland, Societe Generale and Sumitomo Mitsui Banking Corporation. The new loan facility replaces the short-term credit line of Euros1bn organised in a hurry on July 10.
The group aims to reduce its Euros18bn debt load by some Euros5bn in the next nine months and a full Euros10bn over the next two years.
Jean-Rene Fourtou, the chief executive who replaced Jean-Marie Messier in July, last week met with the heads of Vivendi Universal Entertainment and with top brass from Universal. Although he is keen to raise cash from disposals, Fourtou is understood to have assured them that Universal should stay part of the group. A partial flotation is seen as another possibility.
At a group strategy session next week Fourtou is expected to say that Vivendi Universal's water and sewage interests should be sold off. He is also likely to seek approval for a deal to sell Italian pay-TV unit Telepiu to News Corp for Euros1bn - a figure well short of the Euros1.5bn agreed only a few months ago. But how strongly he commits the group to a long term position in film is less clear.
In addition to the Telepiu deal, Vivendi Universal is moving closer to other disposals:
*According to agency reports, employee representatives have been told that set-top box maker Canal Plus Technologies will be sold to Thomson Multimedia for some Euros200m.
*London-based investment fund Elliott Advisors has approached Vivendi Universal with a Euros1.3bn offer to buy phones and cable TV operator Elektrim Telekomunikacja, on condition that Vivendi Universal's joint venture partner withdraws its bankruptcy filing.
*It is entertaining a number of bids for US publisher Houghton Mifflin and has received a bid from the Lagardere group for its French publishing interests.
*There is now talk that Expand, the TV arm of StudioCanal will either be sold or floated separately. Similarly, if a new home cannot be found for the group's computer games businesses a flotation on the NASDAQ exchange is seen as a possibility.