VU BLUES!!!

Vivendi Universal plans to take a charge of as much as $10 billion against its second-quarter earnings to account for a further depreciation of its assets, according to published reports.

New Vivendi Chairman Jean-Rene Fourtou reportedly will announce a write-down of $5 billion to $10 billion, stemming in part from Internet and television assets acquired in December when Vivendi purchased the entertainment assets of USA Networks, the Los Angeles Times reports. Fourtou is expected to announce the write-down tomorrow (8/14) when the company reveals its second-earnings results.

Although Vivendi will show a slight increase in overall sales and earnings, the declining value of those assets means the company will report a net loss for the quarter.

It marks Vivendi's second write-down this year: In April, the company wrote off about $17 billion against first-quarter earnings.

The optional accounting move, according to analysts, reduces some of the uncertainty about the value of the company as it struggles to restructure itself into a smaller, leaner, more cohesive entity, the Los Angeles Times reports. But it also decreases the value of the assets it seeks to sell to reduce its $19 billion debt.

Vivendi's share price continues to be depressed. Speculation about the write-down sent Vivendi shares, already off 70% for the year, down 57 cents to $15.68 on the New York Stock Exchange.

Vivendi's financial problems are the legacy of former Chief Executive Jean-Marie Messier, who sought in recent years to transform the French water and sewer utility company into a media powerhouse by buying media properties. Most recently, Messier bought USA Networks' entertainment assets for $10.3 billion.

Fourtou has said the company plans to sell major assets to reduct debt. He has not, however, said precisely which assets will be sold or when.

At this point, executives at Vivendi's U.S. entertainment units—Vivendi Universal Entertainment and Universal Music—expect Fourtou to sell those units, potentially to the public in a new stock offering this year or next year, the Los Angeles Times said.