"We will get through this difficult period, but at a cost: high interest rates, restrictions on secured assets, an absolute necessity quickly to push through the program of asset sales.''
——Fourtou, VU CEO

VU GETS $2 BILLION IN FINANCING

Banks Save French Major From Filing for Bankruptcy

Vivendi Universal came close to filing for bankruptcy last month, but now has an agreement with its creditor banks for $1.97 billion in financing, company chairman Jean-Rene Fourtou said in a letter to employees and shareholders.

The letter, made public late Sunday, was designed to calm investors after the French media giant's shares lost 42% of their value in just three days last week, according to the Associated Press.

Fourtou said he was confident the company would pull through its financial crisis. "We will get through this difficult period, but at a cost: high interest rates, restrictions on secured assets, an absolute necessity quickly to push through the program of asset sales,'' Fourtou wrote.

Vivendi shares rose nearly 8% on the Paris stock exchange Monday morning.

Fourtou admitted Vivendi's financial situation was ``tense,'' but said he had ``identified the way out of this crisis."

``There was a dramatic short-term liquidity crisis,'' he said. ``On my arrival, on July 3, I found a company on the verge of having to file for bankruptcy.''

Fourtou said the new credit line would be arranged 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 AP says the new money, which $984 million bridge loan negotiated in July, would enable Vivendi to avoid quick sales of assets to keep up debt repayments, Fourtou said.

He pledged to press ahead his $9.84 billion program of asset sales, beginning with Houghton Mifflin, the U.S. publishing house.

He said, however, the asset disposal program would not include Vivendi's 44% stake in telephone unit Cegetel; its 49% of pay-television group Canal Plus; or its subsidiaries Universal Music or Vivendi Universal Entertainment.

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