Vivendi Universal said on Wednesday it has obtained a one-billion-euro ($996-million) credit line from a group of international banks as the beleaguered media giant struggled to avoid a cash crisis and renewed concern about its accounting pushed its shares lower.
The heavily indebted company said in a statement that the credit ”gives the group a source of additional short term liquidity”.
However, Vivendi Universal explained that it was working with its banks in order to obtain refinancing that would ”allow (the company) to fulfil its financing needs in the longer term”.
The company, whose former chairman Jean-Marie Messier was ousted last week in a dramatic boardroom coup, has been struggling to obtain financing to avoid a cash crunch.
The new chairman, Jean-Rene Fourtou, is widely expected to sell off some of the company’s assets in order to improve its financial health.
Despite the announcement of the credit line, shares in the company opened sharply lower here, dropping 6,61% to 17,10 euros in the first minutes of trading.
The stock slumped after the French stock market regulator said the previous night that it had opened an inquiry into the company’s financial reporting going back to January 2001.
”Investigators, according to established procedures, have begun on-site verification of documents,” the Commission des operations de bourse (COB) said in a statement released here on Tuesday after the close of trading.
The inquiry had not been prompted by evidence of accounting irregularities.
The group’s announcement of the fresh financing confirms reports on Monday that Vivendi’s main creditors — BNP Paribas, Societe Generale and Deutsche Bank — had agreed an initial one billion euro credit line.
US credit rating agency Moody’s Investors Service warned on Monday that delays to securing new credit might mean further debt rating downgrades.
Bankers said the company is now trying to agree the terms of a further 2,8-billion-euro secured loan. – Sapa-AFP