The Turnaround of Vivendi Universal

At VU, Fourtou's immediate concern was to find a way of repaying the short-term and medium-term loans of VU and helping the company regain its financial health. In August 2002, VU reported a loss of € 12.3 billion for the first half of 2001-02. The company also revealed that its debt amounted to € 19 billion. In addition, the company's credit rating by rating agencies had dropped to junk status. After these reports, the company's share price dropped by a further 45 percent to € 9. Fourtou promised the shareholders that he would steer the company out of debt and regain its financial health. He wrote an open letter to the shareholders assuring them that he had "identified a strategy for getting out of this crisis..."

However, the company still carried a debt of € 12.337 billion as of December 2002. Revealing his plans for the year 2003, Fourtou said, "2003 will be a year of transition and, with some uncertainties, concerning the successful implementation of our plans and priorities which are now, thankfully, clear." In 2003 the main focus was yet again on reducing the debt burden of the company.

However, this time Fourtou was more concerned about which assets to sell and which to retain. The telecommunications business was clearly given priority over other businesses. The purchase transaction of Cegetel was formally completed in January 2003...