Vivendi could sell Brazilian unit GVT
French media and telecoms company Vivendi is reportedly in the market to divest its Brazilian telecoms business GVT to improve its share price.
It is thought a sale of GVT could be worth up to €8.5 billion, and would be an interesting prospect for potential bidders considering the increasing growth in the Brazilian telecoms market. The Brazilian broadband provider was once thought of by Vivendi board members as an invaluable asset.
Capacity reported last week of Vivendi’s intentions to offload its US gaming unit Activision as part of an internal restructure. The company is being advised by investment banks on whether to break up its media and telecoms group completely or make asset sales to counter the effects of a slumping share price.
Reuters reports the company’s chairman, Jean-Rene Fourtou, is under pressure from ratings agencies to reduce the company’s debt, which stands at €14 billion. Vivendi has a market value of €20.5 billion.
GVT has emerged as a possible unit to sell because the chairman sees it as too risky and too capital-intensive to hold on to, according to reports. It was acquired by the French unit in 2009 for €2.9 billion, beating off advances from Telefónica.
It operates as an alternative provider of fixed-line telephone, broadband and TV services in 120 Brazilian cities.