Shares in the media giant Vivendi Universal have fallen 25% on the Paris stock exchange.

The company's shares have also fallen heavily in New York, closing almost 24% lower.

The sell-off came after Vivendi announced a loss of 12.3bn euros ($12.2bn; �7.9bn) in the first half of 2002.

I suppose any strategy that wasn't Jean-Marie Messier's would do really

Robert Kerr Bank of America

That prompted credit-rating agencies to downgrade Vivendi's credit and debt ratings - which will make it more expensive for the company to pay off its debts.

Vivendi said it was writing off 11bn euros to cover the fall in the value of some of its businesses, particularly in the telecoms sector.

This is effectively an admission that it paid too much for a number of its acquisitions.

The company began life as a French utility but its assets now include Universal Studios and record labels with artists such as U2 and Eminem.

Income rising

Vivendi currently has debts of 35bn euros. It said it planned to sell 10bn euros worth of assets to try to reduce that figure.

It did have some positive news about its business during the first six months of the year.

Operating income rose by 8%, mainly thanks to entertainment and telecoms.

Vivendi reported that all of its businesses were up on the year except music and the internet.

Optimistic forecast

The company has been under a new management team since the controversial former chief executive, Jean-Marie Messier, was ousted in a boardroom coup in July.

The new chairman Jean-Rene Fourtou said he expected Vivendi to post a significant increase in earnings per share.

He said the forecast was based on decisions already made concerning Canal Plus, the internet, general cost reduction and the sale of non-strategic assets.

"I suspect the market is quite relieved in some way Fourtou is now putting forward a strategy," said Robert Kerr, from the Bank of America.

"I suppose any strategy that wasn't Jean-Marie Messier's would do really," he added.