Vivendi May Use Box Office to Help Back $1 Billion in Bonds

The Anthony Hopkins thriller “Red Dragon” has killed at the box office, garnering more than $63 million for Universal Pictures in the last 10 days.

That’s fortunate for parent Vivendi Universal: Vivendi is considering using box-office receipts to help back about $1 billion in bonds the company plans to issue as it restructures its finances, said sources familiar with the plan. The company declined to comment.

Vivendi’s lenders are arranging the bond issue as part of a deal to extend a $1.62-billion loan, which Vivendi received in May to buy Barry Diller’s USA film and television properties. On Tuesday, Vivendi announced that J.P. Morgan Chase & Co. and Bank of America Corp. had agreed to extend the loan repayment eight months until June 30.

Using ticket sales as part of a financing tool, though common at studios such as Walt Disney Co. in the late 1980s and early 1990s, is rare in today’s Hollywood, analysts say.

Lenders prefer to back loans with hard assets, such as a film library or real estate, because of the risk involved, said veteran film financier Lewis Horwitz. “You can produce a film for $60 million, put another $30 million into prints and advertising and get nothing back.”

In Vivendi’s case, the unusual financing may reflect the company’s strained balance sheet and delays in the sale of publishing and other assets, said J.P. Morgan analyst Mark Harrington. “They are trying to be as creative as they can to strengthen their short-term cash position,” he said.

Vivendi’s shares climbed $1.02, or 8%, to $13.14 on the New York Stock Exchange on Tuesday after the French newspaper La Tribune reported that Vodafone Group of Britain might make a bid for the company.

Investment bankers and analysts, however, dismissed that prospect, saying such a deal would harm Vodafone’s balance sheet and its standing with shareholders. Vodafone and Vivendi are both interested in upping their stakes in French telecom company Cegetel.

Times staff writer Corie Brown contributed to this report.