Vivendi SA (VIV) is arranging 7 billion euros ($9.5 billion) of loans for the planned spinoff of its French phone unit SFR, according to two people with knowledge of the matter.

The financing comprises a 1.5 billion-euro credit line and 5.5 billion euros of term loans, said the people, who asked not to be identified because the terms aren’t public. Both companies will seek investment-grade credit ratings after the split.

Jean-Yves Charlier, SFR’s chairman and chief executive officer, told reporters yesterday the company was working on the technical aspects of the spinoff. He dismissed speculation of an alternative merger deal for France ’s second-largest carrier.

“We’re looking at the allocation of debt between SFR and Vivendi and discussing that with ratings agencies ,” Charlier said. “We have one plan, and only one -- it’s splitting SFR from Vivendi.”

A Vivendi official, who asked not to be named citing company policy, declined to comment on the financing.

The Paris-based company is in negotiations with as many as 16 banks to provide the debt, which will be part-repaid after a planned stock listing, said the people. It’s also considering a sale of bonds to replace some of the loans, according to the people.

In addition to the five-year credit line , the company is seeking an 18-month 1.75 billion-euro term loan, a three-year facility of the same size and a five-year 2 billion-euro term loan, said the people.

Shareholder Approval

Vivendi, which will ask shareholders in June to approve a split of the company, wants to file details of the spinoff with market regulators by March, people familiar with the matter said last month. SFR is valued at 12 billion euros, according to analysts at Liberum Capital Ltd, and generated almost 40 percent of its parent company’s sales in 2012, data compiled by Bloomberg show.

As part of the strategy review leading up to the split, Vivendi has sold stakes in video-game developer Activision Blizzard Inc. and Maroc Telecom SA for about $14 billion. Proceeds from the sales helped it cut net debt to 7.2 billion euros at the end of September.

Vivendi and cable operator Numericable SAS have held talks in the past year about a merger without agreeing on valuation, Altice SA, Numericable’s biggest investor, is making a renewed push to consolidate telecommunications assets in Europe , people familiar with the matter said last month.