Heavily indebted Vivendi Universal said Tuesday that it had secured an extension of a $1.62 billion credit line from its banks.
In a statement, the company said it had received commitments from JPMorgan Chase and Bank of America to extend the credit facility from Nov. 1 to June 30, 2003.
An initial short-term credit facility was put in place by the group’s media unit, Vivendi Universal Entertainment, in May 2002 as part of its acquisition of the entertainment assets of USA Networks Inc.
The company indicated the extension would provide Vivendi Universal Entertainment with breathing space before it is able to “replace the credit facility with permanent financing.”
The money should also help clear the last significant hurdle before the company can start drawing on a separate medium-term $3 billion credit facility from a pool of 11 banks, crucial to keeping Vivendi Universal afloat.
That agreement followed protracted talks between the media giant and its creditors, during which the banks put heavy pressure on the company to tame its bulging debts. The deal is due to be formally signed on Nov. 1, the statement said.
Jean-Rene Fourtou, who took over as chairman at troubled Vivendi in July, has announced plans to sell at least $9.3 billion worth of assets over two years to trim its massive debts.