PARIS — Vivendi Universal came close to filing for bankruptcy last month but now has an agreement with its creditor banks for $1.97 billion in financing, company chairman Jean-Rene Fourtou said in a letter to employees and shareholders.
The letter, made public late Sunday, was designed to calm investors after the French media giant's shares lost 42 percent of their value in just three days last week.
Fourtou said he was confident the company would pull through its financial crisis.
"We will get through this difficult period, but at a cost: high interest rates, restrictions on secured assets, an absolute necessity quickly to push through the program of asset sales," Fourtou wrote.
Vivendi shares rose nearly 8 percent on the Paris stock exchange Monday. The company's U.S.-traded shares were up $1.31, or 13 percent, at $11.07 each on the New York Stock Exchange.
Fourtou admitted Vivendi's financial situation was "tense," but said he had "identified the way out of this crisis."
"There was a dramatic short-term liquidity crisis," he said. "On my arrival, on July 3, I found a company on the verge of having to file for bankruptcy."
Fourtou was tapped to replace Jean-Marie Messier, who turned the water company into a world-leading media conglomerate with a whirlwind of costly acquisitions.
Messier was ousted after the company's shares lost 70 percent of their value in a year amid huge debts and the largest losses in French corporate history.
Fourtou said the new credit line would be arranged with major creditor banks — including France's BNP Paribas SA, Societe Generale SA and Germany's Deutsche Bank AG — by the end of September.