Vivendi to sell controlling interest in environmental division

PARIS, France -- Vivendi Universal is giving up control of the world's biggest water services company by selling shares in the unit to help pay
down its mountain of debt.

Vivendi (PEX), the world's second largest media group, said on Monday it had begun selling 15.6 percent, or 53.8 million shares, of Vivendi
Environnement to raise as much as 1.7 billion euros ($1.65 billion).

The share sale, which will close no later June 25, reduces Vivendi's stake in the utility company to 42 percent from 63 percent. It also expected to allow the group to remove Vivendi Environnement's 14 billion euro debt from its balance sheet, leaving it with a total debt of 17 billion euros.

Vivendi's shares, which have fallen about 60 percent this year, dived 10.6 percent to 21.85 euros in midday Paris trading on Monday.

Jean-Marie Messier, Vivendi chief executives, has been under pressure to reduce the group's stake in Vivendi Environnement due to growing concerns among investors and board members over the mounting debt, falling stock price and growing financial losses. 

Messier has transformed Vivendi from primarily a utility concern into the world's second biggest media group behind AOL Time Warner the parent of CNN -- after a $100 billion spending spree on acquisitions over the past two years.

Last week it sold 43.9 million shares, or 12.7 percent, of Vivendi Environnement to Deutsche Bank. Under the terms of the deal -- estimated to bring in about 1.4 billion euros --Vivendi can buy back the stake at a future date.