NEW YORK (CNN/Money) - Vivendi Universal plans to sell at least 10 billion in assets to deal with its liquidity problem as it posts billions of euros in losses, lowers its cash flow guidance and finds its debt downgraded to "junk bond" status.

The world's No. 3 media company saw its shares plunge on both sides of the Atlantic. In Paris, Vivendi shares closed off 4.01, or 25 percent, to 11.89. The American depositary shares of Vivendi (V: down $3.62 to $11.71, Research, Estimates) were down more than 20 percent in mid-afternoon trading in New York.

The drop came after Vivendi announced that it lost 66 million, or 0.06 per share, excluding goodwill and special items, for the first six months of the year, compared with net income of 295 million, or 0.27 per share, a year earlier.

Including all items, the company posted a net loss of $12.3 billion euros, or 11.32 per share, in the first half. Goodwill write-downs came to 11 billion, worse than analysts expected, and special items, primarily due to reassessment of its various investments, came to 3.4 billion.

The company said it plans to sell about 5 billion of assets in the next nine months, and 10 billion within the next two years, in an effort to reduce debt, which it put as one of its top priorities.

The company said its debt minus cash and cash equivalents as of June 30 equaled 35 billion. Company executives said it needs to refinance about 5.6 billion of that debt between now and March of 2003, but said that it is confident it will be able to meet those commitments.

S&P said the company's new cash flow guidance could result in an earlier-than-expected financing gap and make it more difficult for Vivendi to arrange new lines of credit, as well as possibly affect the company's existing bank lines. It lowered its long-term corporate credit rating to BB from BBB, putting it below investment grade, or into so-called junk bond status. It's short-term rating was reduced to an even lower B from A-3 rating. And the ratings remained on credit watch, meaning that S&P is considering lowering ratings further.

Many of its high-profile U.S. media assets likely will be put on the block. Company executives confirmed they include book publisher Houghton Mifflin Co., which it bought for $1.7 billion cash and $500 million in assumed debt last year. Vivendi executives told a conference call Wednesday that it already has been in touch with potential buyers of the publisher.

"The aim is to sell it for more than what we bought it for, and we will do all we can to make that happen," Agnes Touraine, head of Vivendi's publishing business, said on the conference call.

The company also may sell its 10 percent stake in U.S. satellite television provider EchoStar Communications Corp. (DISH: Research, Estimates), according to Vivendi's new CEO Jean-Rene Fourtou. It bought that stake for $1.5 billion in December 2001. Making a profit on that investment will be difficult -- EchoStar has a total market capitalization of $7.1 billion today.

"Depending on the loss, that is something we could do immediately if we wanted," Fourtou said. He was named to the top post last month on the ouster of Jean-Marie Messier, the man who had built Vivendi from a modest French water utility to a media conglomerate.

Vivendi's planned asset sales, while necessary to deal with its liquidity crisis, pose their own risks to its credit outlook, according to S&P.

"Although asset disposals...should result in substantial debt reduction and liquidity improvements, there would be significant business risks for VU if it were to first dispose of its most stable and cash-generative businesses, followed by certain loss-making assets," Guy Deslondes, director of S&P's Milan office, said.  

Reuters contributed to this report