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Vivendi Spinoffs Begin

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Vivendi busts move and itself:

    – Media and entertainment giant Vivendi Universal is selling its money-losing Internet venture and several French magazines, chipping away at its troubled empire to help pay off massive debts.

    The French conglomerate, whose financial problems prompted the ouster of flamboyant chairman Jean-Marie Messier in July, said Friday it was selling its 50 percent stake in Internet venture Vizzavi SA to partner British mobile phone operator Vodafone PLC for 142.7 million euros ($140.27 million) in cash.

    The sale leaves Vodafone as sole owner of the Internet portal except for Vizzavi France. Vivendi has 100 percent control of the French service. Vivendi said it would save 171 million euros ($168.1 million) in planned spending on Vizzavi in 2002-2003.

    “The sale of Vizzavi forms part of the plan to dispose of non-core assets and to reduce cash drains on the Vivendi Universal group,” the company said in a statement.

    Just two years ago, Vizzavi was Messier’s big-ticket dream. It was intended to give subscribers access to Vivendi’s music, movies and games through mobile phones, computers and TV.

    Vivendi said it has also reached a deal to sell its French news magazine group, L’Express-L’Expansion, Comareg small-ads publications, and student magazine L’Etudiant to French publisher SocPresse.

    Those sales were to bring more than 300 million euros ($294.9 million), giving the company a total of about 450 million euros ($442.35 million) from the deals.

    The sales are part of a plan by new chairman Jean-Rene Fourtou to sell at least 10 billion euros ($9.83 billion) worth of Vivendi assets over two years to trim debts and restore the company’s financial health.

    But with debts estimated at around 19 billion euros ($18.68 billion), more selling was expected in Vivendi’s future.

    Vivendi is planning to sell U.S. educational publisher Houghton Mifflin for up to 2 billion euros ($1.97 billion). The Boston-based company was bought last year in an acquisition spree by Messier.

    In addition, Fourtou has said he had an agreement for another 2 billion euros in financing with major creditor banks, including France’s BNP Paribas SA, Societe Generale SA and Germany’s Deutsche Bank AG, by the end of September. The company is believed to have only enough cash to last through October.

    “I am still waiting for two big events: the 2 billion euro credit facility and a big sale, like Houghton Mifflin,” said Mark Harrington, an analyst with JPMorgan.

    Harrington said Vivendi Universal’s chances of recouping the full 2.24 billion euros it paid for the publisher are unlikely, because the gloomy economic outlook could offset Houghton Mifflin’s improved performance.

    Vivendi Universal shares closed up 1.59 percent at 12.80 euros ($12.58) on the Paris stock exchange. The stock has lost nearly 80 percent of its value this year, and 6 percent in the past week. On the New York Stock Exchange, Vivendi’s U.S.-traded shares gained 27 cents to close Friday at $12.96…..

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