Shares in the troubled media giant Vivendi Universal have received a beating following the French stock market watchdog's decision to investigate its accounts.

Traders marked the stock down 7.5% on the Paris exchange, reversing Tuesday's 1.7% rise which was sparked by rumours that a consortium of banks had granted Vivendi a 1bn euro credit line.

The company's shares on the New York Stock Exchange also closed down, losing 6.5%.

On Wednesday Vivendi confirmed that the credit line had been rolled out by a consortium of banks, including BNP Paribas, Societe Generale and Deutsche Bank. The company said the credit would give "the group a source of additional short term liquidity".

But unimpressed investors took little comfort from Vivendi's assurances, instead focusing on the group's long-term prospects.

"The more serious problem for Vivendi is securing financing for the coming months," said one analyst.

So while the new credit line should help stave off a debt downgrade by the credit ratings agency Moody's, it would "obviously... not change the fact that Vivendi Universal must ease its debt", agreed a second analyst.

Time to split

The list of problems faced by Vivendi seems endless.

Its market value has fallen 80% since its peak.

Last year it suffered a 13.6bn euros loss.

And the group is weighed down by a colossal debt mountain of about 20bn euros, 1.8bn of which are due to be repaid this month.

To sort it out, the company said it is working with a group of international banks to obtain refinancing that would allow it "to fulfil its financing needs in the longer term".

But many investors fear that the talks to raise at least 2.8bn might fail and that, eventually, Vivendi's massive debts and extensive financial problems could lead to a break-up of the group.

Meanwhile, the investigators would keep on knocking on its door, predicted one trader.

"Vivendi is likely to be subject to a number of enquiries as it prepares to sell off its assets to reduce debts," he said.

Vivendi, which last week parted company with its flamboyant chief executive, Jean-Marie Messier, has been hit by persistent rumours of accounting irregularities.

Last week, its shares dropped by 40%, after newspaper Le Monde alleged it had tried to add 1.5bn euros to its 2001 accounts as part of a complex transaction involving shares in BSkyB.