Vivendi to forgo cash settlement option for 1.75% bonds exchangeable for Sogecable, may call bonds

By Angela McDaniels

Tacoma, Wash., April 10 - Vivendi Universal said it will not exercise its right to pay cash in lieu of shares for any of its €605.1 million 1.75% exchangeable bonds due Oct. 30, 2008 that are exchanged before April 18.

The bonds are exchangeable for Sogecable SA ordinary shares at a rate of 1.0118 shares per €29.32 principal amount of bonds, according to a company news release.

Grupo Prisa is holding a €28.00-per-share tender offer for all of the shares of Sogecable it does not own. Vivendi said foregoing its cash settlement right will allow bondholders to take advantage of the whole price offered by Prisa for the Sogecable shares. Additionally, Vivendi will immediately pay a sum of €2.00 per bond to any bondholders asking to exchange their bonds.

After April 18, if the number of outstanding exchangeable bonds is less than 10% of the bonds originally issued, Vivendi reserves the right to redeem these outstanding bonds at par of €29.32 plus accrued interest. There are currently €220.5 million of the bonds outstanding, according to the release.

The company said that if it does not redeem the bonds but does decide to tender the underlying Sogecable shares to Prisa, calculation agent Citibank would determine a new underlying security for the bonds.

Vivendi is a Paris-based international media conglomerate.

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