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Annual Report -
2013
-
Vivendi
Financial Report
| Statutory Auditors’ Report on the Consolidated Financial Statements | Consolidated
Financial Statements | Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
4
SECTION 5 - Treasury and capital resources
SECTION 5
Treasury and capital resources
5.1.
Summary of Vivendi’s exposure to credit and liquidity risks
As part of the strategic review undertaken by the Supervisory Board
and Management Board, Vivendi announced in July 2013 its plans
to sell its interests in Activision Blizzard and Maroc Telecom, and in
November 2013, the group’s planned demerger to form two separate
companies: (i) a media group and (ii) SFR, subject to information
and consultation procedures with the relevant French employee
representative bodies and approval by the relevant regulatory
authorities, as well as, if appropriate, its approval by the General
Shareholders’ Meeting. In the meantime, Vivendi has pursued its
financing policy in relation to expiring bank credit facilities or bonds.
Thus, Vivendi early refinanced a €1.5 billion bank credit facility, maturing
in May 2014 with a new bank credit facility for the same amount,
maturing in March 2018, and issued a new €750 million bond, with
a coupon of 2.375%, which early refinances the €894 million residual
amount bond issued in January 2009 with a coupon of 7.75%, maturing
in January 2014.
On October 11, 2013, Vivendi completed the sale of 88% of its interest
in Activision Blizzard for $8.2 billion (€6 billion) in cash. Vivendi used
cash on hand to early redeem most of its US dollar-denominated bonds,
as well as a portion of its euro-denominated bonds, having the shortest
maturity, for an aggregate amount of €3 billion (including $2.1 billion
and €1.5 billion), either through a tender offer in October 2013 and a
make-whole redemption in November 2013. In addition, Vivendi used
the available balance to redeem drawn bank credit facilities. These
transactions were as follows:
72% redemption of three US dollar-denominated bonds, following
a tender offer:
–– $459 million redeemed on the $700 million bond, maturing
in April 2018,
–– $541 million redeemed on the $800 million bond, maturing
in April 2022, and
–– $555 million redeemed on the $650 million bond, maturing
in January 2018;
early full redemption of one US dollar-denominated bond and two
euro-denominated bonds:
–– $550 million, maturing in April 2015,
–– €500 million, maturing in November 2015, and
–– €1,000 million, maturing in July 2015.
In October 2013, Vivendi also redeemed, upon its contractual maturity
date, a €700 million bond, refinanced in December 2012, by a bond
for the same amount, maturing in January 2020, and cancelled SFR’s
€1.2 billion bank credit facility.
Moreover, on November 5, 2013, Vivendi acquired the 20%
non-controlling interest in Canal+ France held by Lagardère for
€1,020 million, in cash.
Finally, on November 26, 2013, the Supervisory Board approved the
group’s planned demerger to form two separate entities: (i) a media
group and (ii) SFR. Subject to information and consultation procedures
with the relevant French employee representative bodies and
approval by the relevant regulatory authorities, it could be submitted,
if appropriate, to the General Shareholders’ Meeting for approval on
June 24, 2014. The potential impacts of this demerger on the group’s
financing structure will become effective if and when a final decision to
implement such a transaction is taken.
Preliminary comments
Vivendi considers Financial Net Debt, a non-GAAP measure, to be a relevant indicator in measuring Vivendi’s indebtedness. Financial Net
Debt is calculated as the sum of long-term and short-term borrowings and other long-term and short-term financial liabilities as reported on
the Consolidated Statement of Financial Position, less cash and cash equivalents as reported on the Consolidated Statement of Financial
Position as well as derivative financial instruments in assets, cash deposits backing borrowings, and certain cash management financial
assets (included in the Consolidated Statement of Financial Position under “financial assets”). Financial Net Debt should be considered in
addition to, and not as a substitute for, other GAAP measures reported on the Consolidated Statement of Financial Position, as well as other
measures of indebtedness reported in accordance with GAAP. Vivendi Management uses Financial Net Debt for reporting and planning
purposes, as well as to comply with certain debt covenants of Vivendi.
In addition, cash and cash equivalents are not fully available for debt repayments since they are used for several purposes, including but not
limited to, acquisitions of businesses, capital expenditures, dividends, contractual obligations and working capital.
