Vivendi Universal lashed out yesterday at press reports that suggested the media conglomerate was technically bankrupt.
Le Monde, France's newspaper of record, reported that during December last year the group's liabilities came breathtakingly close to exceeding its assets. Le Monde said its Euros 2bn of reserves were all but absorbed by finance costs, tax and a commitment to paying out Euros 1bn of dividends. That left the company some Euros 200,000 away from insolvency, bringing it to the brink of reneging on some of its payments.
"Vivendi categorically denies that the group came close to halting payments at the end of 2001," a spokesman told Reuters.
The outfit's financial weakness and collapsed shares mean that it is now seeking to renegotiate deals based on guaranteed Vivendi's share price - which has plunged steeply this year. And the proposed purchase of pay-TV group Telepiu, which was this week formally approved by Italy's competition authorities, may now be jeopardised by Vivendi's financial woes.
In an effort to bring in money, Vivendi this week announced that it had appointed Goldman Sachs and Deutsche Bank to handle the disposal of its£1.7bn stake in BSkyB.
But even this may not be enough to help the beleaguered Vivendi chief Jean-Marie Messier, who is now not going to go ahead with a new annual general meeting to try and rectify what he believed to be voting irregularities at the companies last AGM. Le Monde also reports a growing frustration with the company on the part of the Bronfman family, which sold Seagram and Universal to Vivendi two years ago. At a Vivendi share price below Euros 32 Edgar Bronfman is said to be seriously interested in buying back "his" company.