PARIS, Dec 9 (AFP) - The French media and telecommunications group Vivendi Universal said Thursday it would earn 1.5 billion euros (1.9 billion dollars) from the sale of a 15 percent stake in the utilities and water company Veolia Environnement.
The sale will reduce Vivendi's stake in Veolia, a former division of the Vivendi group, to 5.3 percent from 20.3 percent.
The proceeds will be used to reduce debt and marks a step toward the group's recentering on media and telecommunications, Vivendi said.
A 10 percent stake was sold directly on the market at 24.65 euros per share, in a deal that received "a very favourable reception" from investors and netted 996.8 million euros, the company said in a statement.
The offer price was 2.8 percent above Wednesday's share closing price for Veolia of 23.97 euros.
The sale was made ahead of the expiration on December 29 of a lock-up period on Vivendi's holding.
Vivendi borrowed shares from other Veolia institutional investors to proceed with Thursday's placement, and will return them at the end of this month.
A further two percent stake will be sold to Veolia Environnement on December 29 at Wednesday's closing price of 23.97 euros, generating 194.8 million euros.
Vivendi also agreed to a transaction with Societe Generale that included the sale of three percent of Vivendi's holding in Veolia to the bank for a total 305.5 million euros.
Vivendi will not book a capital gain on the total transaction, since the proceeds will offset current capital losses.
At the end of 2004, the company's net debt will be approximately four billion euros.
On completion of these transactions, Vivendi will own a 5.3 percent holding in Veolia, which it has pledged will not be sold for 180 days.
Vivendi long had signalled it would sell the shares under a restructuring program that includes asset disposals to reduce its debt pile after a major acquisitions spree.
Investors cheered the deal Thursday. Shares in Veolia jumped 3.46 percent to 24.80 euros, while Vivendi was up 1.51 percent at 22.91 euros in midday Paris trading, bucking a weaker market. The CAC 40 index was off 0.26 percent overall.
12/09/2004 15:28 GMT - AFP