The Dream of Being World No 1
Veolia was born in 2003 following the financial crash of Vivendi Universal, one of the multinational companies which, in times of hyper-globalised market speculations were planning to become World No 1 of the mega players incensed by the media. Six years before the worldwide burst of the financial bubble, the dream of Jean-Marie Messier, at that time chairman of the Vivendi’s board, to become Mr Universe turned into the nightmare of bankruptcy and the biggest capital loss among the French companies. He is to this day being sued by swindled investors all over the world. Since then, Veolia Water, with 8400 operation contracts, has clearly fulfilled Messier’s dream. At least in the world of private water handlers the multinational is the indisputable No 1! Has this erased the memory of the not so long ago downfall of the “mother” company? Sceptics, in this case, are the most realistic. Only in 2008, Veolia’s stock lost 70% of its market value, where their net debt rose to a problematic € 16.33 billion (against only € 5.727 billion of long-dated assets). In the world of water distribution, investments, for instance in the field of piping, are made with a life expectation of 30 years. The deadline for measures to be taken for the protection of ground water resources is much longer. But for Veolia, life expectation is of one accounting year, after which time shareholders, depending on the results in the balance sheet, will turn their thumbs up or down. Next year already, everything can be totally different. Who will take the risk of approving long-term investments? There is not one investor today who will bet a cent on a 30-year survival of Veolia. Soon, many more dreams of becoming No. 1 of the world will undoubtedly have disintegrated, to the tune of billions in losses.
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