Page 355 - 2012 Annual Report

355
VIVENDI l 2012 l Annual Report
FINANCIAL REPORT – CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE
CONSOLIDATED FINANCIAL STATEMENTS – STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS –
STATUTORY FINANCIAL STATEMENTS 4
4
IV - VIVENDI SA 2012 STATUTORY FINANCIAL STATEMENTS
3. NOTES TO THE 2012 STATUTORY FINANCIAL STATEMENTS
Note 25 Instruments Used to Manage Borrowings
Note 25. Instruments Used to Manage Borrowings
Vivendi manages its financial liquidity, interest rate and foreign currency
exchange rate risks centrally. Vivendi’s Financing and Treasury Department
conducts these operations, reporting directly to the Chief Financial
Officer of Vivendi, who is also a member of the Management Board. The
department has the necessary expertise, resources (in particular, technical
resources) and information systems for this purpose.
Vivendi uses various derivative financial instruments to manage and
reduce its exposure to fluctuations in interest rates and foreign currency
exchange rates. All instruments are traded over-the-counter with
highly-rated counterparties.
The majority of Group financing is secured directly by Vivendi SA, which
provides financing to its subsidiaries as and when necessary.
As of December 31, 2012, Vivendi SA’s open swaps, which qualify for
hedge accounting, totaled €1.9 billion including €1,450 million of fixed-
rate receiver swaps with an average duration of 4.4 years and €450 million
of fixed-rate payer swaps with an average duration of 5.25 years.
DYNAMO AGAINST VIVENDI
On August 24, 2011, the Dynamo investment funds filed a complaint for
damages against Vivendi before the Bovespa Arbitration Chamber (São
Paulo stock exchange). According to Dynamo, a former shareholder of GVT
that sold the vast majority of its stake in the company before November 13,
2009 (the date on which Vivendi took control of GVT), the provision in
GVT’s bylaws providing for an increase in the per share purchase price
when the 15% threshold is crossed (the “poison pill provision”) should
allegedly have applied to the acquisition by Vivendi. Vivendi, noting that
this poison pill provision was waived by a GVT Shareholders’ General
Meeting in the event of an acquisition by Vivendi or Telefonica, denies all
of Dynamo’s allegations.
HEDGING-GRIFFO AGAINST VIVENDI
On September 4, 2012, Hedging-Griffo filed a complaint against Vivendi
before the Arbitration Chamber of the Bovespa (São Paulo Stock Exchange)
seeking to obtain damages for losses they allegedly incurred due to the
conditions under which Vivendi completed the acquisition of GVT in 2009.
Hedging-Griffo demanded compensation for the difference between the
price at which they sold their GVT shares on the market and the price paid
by Vivendi in connection with the tender offer for the GVT shares. Vivendi
believes that the decision taken by the Hedging-Griffo funds to sell their
GVT shares before the end of the stock market battle that opposed Vivendi
against Telefonica was their own decision made in the context of their
management of these funds and can in no way be attributable to Vivendi.
Instruments held by Vivendi SA to hedge borrowings are broken-down
as follows:
Vivendi SA External Hedging Arrangements
(in millions of euros)
As of December
31, 2012 Average rate
Maturing
within
< 1 year
Maturing
within 1
to 5 years
Maturing
within
> 5 years Counterparty
Fixed-rate receiver swaps 1,450 4.39% - 1,450 - Banks
Fixed-rate payer swaps 450 0.95% - - 450 Banks
TOTAL 1,900 0 1,450 450
As of December 31, 2012, there was no internal hedging between
Vivendi SA and its subsidiaries.