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Annual Report -
2013
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Vivendi
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Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements | Consolidated
Financial Statements | Statutory Auditors’ Report on the Financial Statements |
Statutory Financial Statements
Note 23. Financial Commitments and Contingent Liabilities
GVT
Vivendi gave a financial guarantee for an amount of $31 million,
which expires on November 18, 2020, in connection with the
liquidation of Brazil Holdings, LLC in November 2010.
SFR
As part of the takeover of Neuf Cegetel, the approval from the
Ministry of Economy, Industry and Employment, dated April 15,
2008, resulted in additional commitments from Vivendi and SFR.
They address competitor access and new market entrants to
wholesale markets on SFR’s fixed and mobile networks, acceptance
on the fixed network of an independent television distributor if such
a player appears, as well as the availability, on a non-exclusive
basis, of ADSL on eight new channels which are leaders in their
particular field (Paris Première, Teva, Jimmy, Ciné Cinéma Famiz,
three M6 Music channels and Fun TV). All these commitments
expired in April 2013.
NBC Universal
As part of the NBC Universal transaction which occurred in
May 2004, Vivendi and General Electric (GE) gave certain reciprocal
commitments customary for this type of transaction, and Vivendi
retained certain liabilities relating to taxes and excluded assets.
Vivendi and GE undertook to indemnify each other against losses
resulting from, among other things, any breach of their respective
representations, warranties and covenants. Neither party will have
any indemnification obligations for losses arising as a result of any
breach of representations and warranties (i) for any individual item
where the loss is less than $10 million and (ii) in respect of each
individual item where the loss is equal to or greater than $10 million
except where the aggregate amount of all losses exceeds
$325 million. In that event, the liable party will be required to pay
the amount of losses which exceeds $325 million, but in no event
will the aggregate indemnification payable exceed $2,088 million.
In addition, Vivendi will have indemnification obligations for 50%
of every US dollar of loss up to $50 million and for all losses in
excess of $50 million relating to liabilities arising out of the Most
Favored Nation provisions set forth in certain contracts. As part of
the unwinding of IACI’s interest in VUE on June 7, 2005, Vivendi’s
commitments with regard to environmental matters were amended
and Vivendi’s liability is now subject to a de minimis exception of
$10 million and a payment basket of $325 million.
The representations and warranties given as part of the NBC
Universal transaction other than those regarding authorization,
capitalization and tax representations terminated on
August 11, 2005. Notices of environmental claims related to
remediation must be brought by May 11, 2014. Other claims,
including those related to taxes, will be subject to applicable
statutes of limitations. The sale of Vivendi’s interest in NBC
Universal to GE completed on January 25, 2011 did not modify these
commitments.
Holdings and others
On March 4, 2013, a letter of credit for €975 million, maturing in
March 2016, was issued in connection with Vivendi’s appeal against
the Liberty Media judgment (please refer to Note 24, Litigation). This
off-balance sheet financial commitment has no impact on Vivendi’s
Net Debt . This letter of credit is guaranteed by a syndicate of fifteen
international banks with which Vivendi has signed a Reimbursement
Agreement which includes an undertaking by Vivendi to reimburse
the banks for any amounts paid out under the letter of credit. The
Reimbursement Agreement notably contains events of default and
acceleration clauses similar to those contained in Vivendi’s credit
facilities. In certain circumstances, these provisions could cause
Vivendi to have to post cash collateral for the benefit of the banks.
In the same way, if one of the fifteen banks defaults in respect
of its obligations and is not able to issue a guarantee sufficient
enough to provide comfort to Bank of America, Vivendi could be
caused to substitute such bank with another bank or, as a last
resort, be obligated to post cash collateral in the amount of such
bank’s participation in the letter of credit. As of December 31, 2013,
Vivendi SA was in compliance with the terms of the letter of credit.
As of December 31, 2013, Vivendi continued to guarantee
commitments given by certain subsidiaries of Veolia Environnement
in an aggregate amount of approximately €7 million, mainly in
relation to a performance bond given to a local US authority.
All of these guarantees have been counter-guaranteed by Veolia
Environnement.
