Paris-based Vivendi Universal has confirmed plans to break up its media empire, thereby lightening its US$18.6 billion debt. The plan sees the Canal+ Group transfer its shares in Canal+ Distribution, CanalSatellite, Canal+ Regie, Multithématiques, itelevision, Pathe Sport, Media Overseas, Sogecable and Studio Canal to Canal+ SA, a company on the Paris stock exchange and licensed by the French media authority. VU’s international assets, including pay tv operations such as Telepiu in Italy, will be retained by the Canal+ Group, with the goal of selling some or all of them.
The restructuring comes at a make-or-break time for the media giant: in mid-August the company reported a loss of more than US$12 billion for the first half of the year. ‘We have to cut immediately the cash drain…mainly the non-French activities of the Canal+ group, the Internet and the huge level of corporate overhead,’ VU president and CEO René Fourtou said after the release of the report. Debt rating agency Standard & Poor’s has since cut VU’s long-term corporate credit rating to junk status.