The French media conglomerate Vivendi has reported that it lost $12 billion in the first half of the year. Stock in the company, which owns Universal films and music, dropped 25 percent. The company, which had already forced out its controversial chairman, now faces more changes.

Vivendi is $35 billion in debt and faces an urgent need to raise more money. It will sell about $10 billion in assets, including the Houghton Mifflin publishing company, and will try to raise another $5 billion.

That may be more difficult and expensive since the ratings firms Standard & Poor's and Moody's downgraded Vivendi's bonds to junk status.

Vivendi's stock was down 25 percent on the Paris exchange and helped to drive prices down in European markets. The Dow Jones index of 50 leading stocks, including Vivendi, lost 4 percent.

Vivendi reported its earnings in the first half of the year actually increased.

But it is writing off $11 billion it spent to acquire media companies. In effect, that's an admission that it paid too much for Universal and other properties which were acquired by former chairman Jean-Marie Messier.

He turned a former water utility into a global rival of such media conglomerates as AOL Time-Warner. The transformation of the company was controversial and costly. Vivendi also lost $12 billion last year, and Mr. Messier was ousted in a boardroom coup.