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Vivendi cuts debt with €1.5 billion sale

Vivendi Universal is to dispose of 15% of its stake in Veolia Environment in order to pay back debt and increase its focus on media and telecommunications. The sale, which will reduce its stake in its former water subsidiary from 20.3% to 5.3%, will cut Vivendi's net debt to approximately ?4 billion ($5.3 billion) and raise ?1.5 billion. The disposal will be implemented through three transactions. In the first, Vivendi Universal will offer 40.4 million of its shares ? 10% of its stake ? in Veolia Entertainment through an accelerated book building (ABB), with Deutsche Bank, Société Générale (SGCIB) and Lazard-Ixix acting as joint bookrunners.

In the second transaction, which takes place on December 29, Veolia Environment buy back 2% of itself from Vivendi.

In the third transaction Vivendi will enter into a derivative transaction with SGCIB on 5% of Veolia Environment. This will offer Vivendi 100% of the upside above the ABB price, with its exposure to the downside limited to 3% below the ABB price. As part of its hedging, SGCIB will buy 3% of Veolia Entertainment from Vivendi.

The sale follows a successful ?3 billion refinancing deal in the summer, involving a ?2.3

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