Canal+ Polska could be for sale under restructuring plan

Pay-TV broadcaster Canal+ Polska could be among Vivendi Universal's assets for sale following a restructuring plan announced last week by Vivendi's new chief executive officer, Jean-Rene Fourtou. The debt-laden French media giant plans to sell a number of its subsidiaries in an attempt to shore up its balance sheet. "Vivendi Universal is carrying too much debt: no matter what, lowering the debt burden will require significant asset disposals," said Fourtou in a statement last week. "However, we do not intend to rush into any actions that would damage the company, its shareholders and the businesses involved." Fourtou said that the non-audited preliminary consolidated results for the second quarter and first half of 2002 were expected on Aug. 1. Under the restructuring plan, Canal+ Group, the Vivendi subsidiary that controls Canal+ Polska, would be grouped around Paris-listed Canal+ SA.

After the restructuring, Vivendi would hold 49% of the new group. The companies to be transferred to Canal+ SA include Studio Canal, a movie producer and programming rights distributor, CanalSatellite, Canal+Distribution and Sogecable, a digital platform in Spain. The remaining assets, especially those held outside France, including Canal+ Polska, will stay in Canal+ Group, "with a view to disposing of all or some of them," according to the company's statement. The cash injection that Vivendi desperately needs will come from selling equity exceeding the 49% held in Canal+ SA and the sale of some international assets such as Telepiu in Italy, which, according to analysts, should bring up to $2.5 billion. Rupert Murdoch's News Corporation is negotiating to buy Telepiu. Arnaud de Villeneuve, Canal+ Polska's chief executive officer who replaced Christian Kozar earlier this month, was unavailable for comment.

Canal+ Polska has been more of a burden for Canal+ Group than an asset. Its core business, the Cyfra+ digital platform, has never generated a profit. Last year it merged with another cash-strapped platform, Wizja TV, in hopes of solving the company's financial woes. At the time, Kozar said Canal+ would need 12-18 months to breakeven. Jakub Brzźczkowski, the managing director of Canal+ Polska, told Gazeta Wyborcza last week that Nowa Cyfra+ is close to breaking even. But according to market observers, it won't be easy to find a buyer. "I heard there are four offers, including three from French companies," said Andrzej Zarźbski, a media consultant and former member of the National Television and Radio Council, Poland's media regulatory body. "The question is whether Vivendi decides to sell its international operations in a package or separately. If it sells its Polish operations alone, it'll never get its huge investment back."