Vivendi posts $12 billion loss

Fourtou: Reviewing all assets

PARIS, France (CNN) -- Vivendi Universal, the world's second-biggest media company, posted a first-half loss of 12.3 billion euros ($12 billion) after slashing the value of assets bought by ousted chief executive Jean-Marie Messier.

The company had a loss of 11.32 euros a share, compared with profit of 22 million euros, or 0.02 euros, in the first half of 2001.

It wrote off 11 billion euros associated with Messier's $70 billion spending spree that lumped Vivendi with a debt pile of 35 billion euros, a figure that includes debt belonging to its water and sewage utility.

New Chief Executive Jean-Rene Fourtou said he plans to sell at least 10 billion euros of assets in an effort to cut debts. Among the assets for sale is Boston-based publisher Houghton Mifflin, which Vivendi bought for $2.2 billion in June 2001.

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Vivendi's stock, which has fallen more than 75 percent this year, dropped 6.5 percent to 14.98 euros in midday trading on Wednesday in Paris.

"My primary objective is to create as much value for shareholders as possible by focusing on three priorities," said Fourtou in a statement. "First, reducing debt. Second, improving profitability of the businesses. Third, determining a long-term strategy for Vivendi Universal."

A detailed review of all assets is planned for September 25 and the company has pledged to raise 5 billion euros over the next nine months to slash debt, said Fourtou. Vivendi's debt, excluding the water unit, stood at 19 billion euros at the end of June 30.

"Vivendi Universal has around 10 billion euros of debt above the comfortable level," said Fourtou.

Vivendi, which owns Universal Studios and record labels with artists like U2 and Eminem, was forced to write down the value of assets in late April by 17.06 billion euros, under U.S. accounting standards, causing it to report a 17 billion euro first-quarter loss.

Messier spent billions building up the empire to challenge the world's biggest media group, AOL Time Warner (AOL), which is the parent of CNN.

Acquisitions included a $30 billion buyout of Canada's Seagram and a $10.3 billion purchase of USA Networks, a cable and entertainment company run by Hollywood mogul Barry Diller.

First-half group revenue rose to 30.6 billion euros, up 8 percent on the year ago figure, with only the music business showing a decline in revenue. Consolidated operating income rose 8 percent on a comparable basis to 2.4 billion euros, primarily driven by entertainment and telecoms business.