The ratings reflect Vivendi Environnement S.A.'s (VE) top-tier global positions in water and waste management activities, as well its major involvement in European energy and collective-transportation services. Consolidated sales totaled €26.4 billion in 2000. The company's low-risk business profile--benefiting from recurring income under long-term contracts--is offset at the current rating level by a still weak, but improving, financial profile; in particular, its balance sheet is highly leveraged (total net debt to total capital was 67% at year-end 2000). Following the IPO in July 2000, VE is still 72% owned by Vivendi-Universal S.A. (BBB/Watch Neg/A-2). The presence of minority shareholders and the expectation that Vivendi-Universal's stake may be diluted further over the coming years imply that VE's current ratings are principally
