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Activision Blizzard majority shareholder Vivendi has been denied a 1 billion euro ($1.32 billion) credit line, with lenders demanding that the company pay a higher interest rate than originally offered.
December 13, 2011
1 Min Read
Activision Blizzard majority shareholder Vivendi has been denied a 1 billion euro ($1.32 billion) credit line, with lenders demanding that the company pay a higher interest rate than originally offered, according to media reports. Growing concerns surrounding the current European debt crisis means that Paris-based Vivendi has now been offered an interest rate of 90 basis points above the Euro Interbank Offered Rate, up from the 75 basis points that the company previously put forward, reports Bloomberg. This compares to data from Bloomberg which shows that the average interest rate for investment-grade companies in France increased from 48.8 basis points to 60 during the first eight months of the current fiscal year. Roger Francis, analyst at Mizuho Securities, explained, "Banks are pretty constrained in their access to liquidity and they are passing that on to their clients." "They wouldn't be terribly eager to lend to a big, blue-chip company who wants cheap funding as not only would it push up their capital requirements, it's not very lucrative lending either." Vivendi recorded profits for the second-half of the current fiscal year, thanks to digital sales from Activision Blizzard's online-enabled franchises such as World of Warcraft. However, the company was forced to sell 35 million of its shares in Activision Blizzard last month, in order to raise $427 million in capital.
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