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Financial Report | Statutory Auditors’ Report on the Consolidated Financial Statements |
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Financial Statements
| Statutory Auditors’ Report on the Financial Statements | Statutory Financial Statements
Note 27. Contractual obligations and other commitments
(f)
As part of the takeover of Neuf Cegetel, the approval from the Ministry of Economy, Industry and Employment, dated April 15, 2008, resulted in
additional commitments from Vivendi and its subsidiaries. They address competitor access and new market entrants to wholesale markets on
SFR’s fixed and mobile networks, acceptance on the fixed network of an independent television distributor if such a player appears, as well as the
availability, on a non-exclusive basis, of ADSL on eight new channels which are leaders in their particular field (Paris Première, Teva, Jimmy, Ciné
Cinéma Famiz, three M6 Music channels and Fun TV). All these commitments expired in April 2013.
(g)
In connection with the sale of its 49.9% interest in Sithe to Exelon in December 2000, Vivendi granted customary representations and guarantees.
Claims, other than those made in relation to foreign subsidiary commitments, are capped at $480 million. In addition, claims must exceed
$15 million, except if they relate to foreign subsidiaries or the divestiture of certain electrical stations to Reliant in February 2000. Some of these
guarantees expired on December 18, 2005. Some environmental commitments still exist and any potential liabilities related to contamination risks
will survive for an indefinite period of time.
(h)
In connection with the sale of real estate assets in June 2002 to Nexity, Vivendi granted two autonomous first demand guarantees, one for
€40 million and one for €110 million, to several subsidiaries of Nexity (Nexim 1 to 6). The guarantees are effective until June 30, 2017.
(i)
After having sold the companies carrying credit lease commitments in relation to the Berlin buildings Lindencorso, Anthropolis and Dianapark
(the “Companies”), in November 2007, Vivendi continued to guarantee certain lease payment obligations. As a result of the early exercise by
the Companies of their call options on the buildings, Vivendi’s guarantees were terminated on October 5, 2012. In return, the counter-guarantee
provided by the acquirors of the Companies to Vivendi (€200 million) was cancelled, as well as the pledge over the cash of the divested companies
to the benefit of Vivendi. Vivendi has retained tax guarantees given at the time of the disposal of the Companies.
(j)
On December 14, 2010, Vivendi, Deutsche Telekom, Mr. Solorz-Zak (Elektrim’s main shareholder) and Elektrim’s creditors, including the Polish State
and Elektrim’s bondholders, entered into various agreements to put an end to the litigation surrounding the share capital ownership of Polska
Telefonia Cyfrowa (PTC), a mobile telecommunication operator. With respect to these agreements, Vivendi notably entered into the following
commitments:
Vivendi granted to Deutsche Telekom a guarantee over Carcom that was capped at €600 million, which expired in August 2013;
Vivendi committed to compensate Elektrim SA (Elektrim) for the tax consequences of the transaction, with a cap at €20 million. This
commitment expired in July 2011 and the claims were settled in June 2012;
Vivendi committed to compensate Law Debenture Trust Company (LDTC) against any recourse for damages that could be brought against
LDTC in connection with the completed transaction, for an amount up to 18.4% for the first €125 million, 46% between €125 million and
€288 million, and 50% thereafter; and
Vivendi committed to compensate Elektrim’s administrator for the consequences of any action for damages that may be taken against it, in
connection with the decisions that were taken to end certain procedures.
(k)
The Share Purchase Agreement dated as of October 2, 2006 between Tele2 Europe SA and SFR contains representations and warranties which
expired on January 20, 2009 and warranties relating to claims arising with respect to tax and social matters, which expired end of March 2012.
On July 18, 2007, by way of implementation of the European Union antitrust regulation, the European Commission approved the purchase of the
fixed and internet activities of Tele2 France by SFR, subject to commitments on the handling and distribution of audio-visual content for a five-year
period. All these commitments expired on July 18, 2012.
(l)
Vivendi received guarantees in respect of the repayment of amounts paid in July 2007 (€71 million), in the event of a favourable decision of the
Spanish Courts concerning Xfera’s tax litigation seeking to cancel the 2001, 2002 and 2003 radio spectrum fees. These guarantees include a first
demand bank guarantee relating to 2001 fees for an amount of €57 million.
Several guarantees given in 2013 and during prior years in connection
with asset acquisitions or disposals have expired. However, the
time periods or statute of limitations of certain guarantees relating,
among other things, to employees, environment and tax liabilities,
in consideration of share ownership, or given in connection with the
dissolution or winding-up of certain businesses are still in effect. To
the best of Vivendi’s knowledge, no material claims for indemnification
against such liabilities have been made to date.
In addition, Vivendi regularly delivers, at the settlement of disputes and
litigations, commitments for damages to third parties, which are typical
in such transactions.
