Viv U arm gets credit line extension
Extra time will be used for negotiation
The extra time will be used to negotiate a long-term refinancing plan that could take the form of a new bond issue, private equity investment or even new equity. If VUE attains "a certain level of permanent refinancing by June 30," the maturity of the credit balance may be extended through Sept. 30, the company said in a statement. VUE set up the facility in May as part of Viv U's acquisition of the entertainment assets of USA Networks.
Extending the VUE bridge loan was a crucial and contingent step toward Viv U's more critical efforts to set up a new O3 billion ($2.9 billion) credit line, which is scheduled to close Nov. 1.
Still, the refinancing package doesn't solve the deleveraging challenge of selling major assets in a down market. The company has repeatedly put back deadlines for its publishing units as it squabbles over valuations with potential buyers.
The most likely buyers for a package of assets, led by educational publisher Houghton Miflin, are now thought to be financial investors such as Blackstone Group, Kohlberg Kravis Roberts, Bain, Apax and a joint bid by French media group Lagardere and investment firm Ripplewood.
Buoyed by the overall market rally Tuesday, Viv U shares climbed $8.4% to close at $13.14.
Viv U shares apparently were also boosted by a specious report in French newspaper La Figaro that U.K. telco Vodafone was pondering a takeover of the company for $14.73 per share if it is unable to seal a deal to buy out their jointly held Cegetel unit in France.
Viv U sources denied the report and refused to comment further on "pure speculation." Given the number of investment bankers vying for the right to solve Viv U's structural and financial problems, it's hardly surprising that so many possible deal structures have surfaced, said one source close to the company.
