S&P puts Vivendi on watch

S&P said it placed its Vivendi SA’s ratings on CreditWatch with negative implications.

The placement follows Vivendi’s plan to spin off a 60% stake in its Universal Music Group and would keep only a 20% stake in UMG. Vivendi had planned to maintain a 50% stake plus one share in UMG. S&P said it estimates UMG accounted for about 45% of Vivendi’s revenue in 2020.

“We see a high probability of a downgrade by at least one notch if the transaction is approved with the current terms. Further rating downside is possible if financial leverage does not decline very significantly to levels that would compensate for the weakened business risk profile or if the company does not show a more consistent and significantly more conservative financial policy, aligned with an investment-grade rating,” the agency said in a press release.

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