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Vivendi hammered by record loss
PARIS, France (Reuters) -- Vivendi Universal shed more than a billion euros in market value on Friday as its shares dropped over eight percent to their lowest level in over three months on the back of France's worst corporate loss. Shares in the world's second largest media group fell as much as 8.7 percent to 11.35 euros, helping to drag the Paris blue-chip index below a key level of support and extending a loss of 4.3 percent seen ahead of its 2002 results on Thursday. Vivendi late on Thursday posted a wider than expected net loss of 23.3 billion euros ($25.66 billion), snatching the record for a French company loss briefly held by France Telecom after massive writedowns on the value of its French-American media assets. Analysts said despite efforts to wipe the slate clean with more than 18 billion euros of goodwill writedowns for 2002, doubts remained over Vivendi's strategy and liquidity position. Dealers said UBS Warburg had cut its target on the stock to 13 euros from 16.5, citing Vivendi's failure to outline its strategy or a clear path towards meeting its goal of seven billion euros in 2003 asset sales in its fight to cut debt. Some analysts also blamed the goodwill and other exceptional charges for blurring Vivendi's underlying performance, making the 2002 results statement difficult to interpret. "The market won't like the opaqueness of the figures. We are positive on the stock because of possible asset sales but there was nothing solid enough in the statement to push this story forward,'' said one media analyst in London. Vivendi chief Jean-Rene Fourtou on Thursday reaffirmed Vivendi's asset disposal targets, but declined to give specifics beyond saying he was talking to several people interested in the group's U.S. portfolio that includes Universal Studios. Analysts say solid progress on asset sales is needed to avoid a further cash squeeze in June or July after Vivendi narrowly avoided a cash crunch at the same time last year. Fourtou told analysts 2003 would be a year of transition and that Vivendi should be judged on its results in 2004. Vivendi had already plunged deeply into the red in 2001 after a debt-fuelled acquisition binge by Fourtou's predecessor Jean-Marie Messier, ousted in a boardroom coup last July. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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