Vivendi rules out split of telecoms and media businesses
French conglomerate Vivendi today ruled out splitting its telecoms and media businesses because of the impact it would have on the group’s €14 billion of debt.
"Clearly a breakup would lead to very great difficulty in apportioning the debt”, Philippe Capron, CFO at Vivendi, told analysts. He also said that a split would make it very difficult for both entities to keep their credit ratings.
Capron’s comments came as Vivendi released its first half financial results, announcing a 17% fall in first-half net income to €1.5 billion, compared to the same period last year, with the domestic mobile price war and an increase in French taxes blamed for the dip.
It was not all gloom for the company, however, after it announced that EBITDA would be significantly better than its €2.5 billion target for 2012 and that it hoped debt would be cut well below its current level.
Analysts believe that this positive projection will ease pressure on Vivendi to sell its assets. With the group having eyed the sale of its stake in gaming company Activision Blizzard, and hired advisors to consider options for the sale of Brazilian telecoms business GVT.
Vivendi said that it was not ready to provide an update on its possible asset sales or any other restructuring of the business for now.