Debt-laden retailer Casino takes step to start talks with creditors - sources

Teract SA

24/05/2023 13:18

By Dominique Vidalon
       PARIS, May 24 (Reuters) - French retailer Casino
 CASP.PA  is looking to start official negotiations with its
creditors as it seeks a way out of its financial woes while
weighing two tie-up bids from wealthy investors, two sources
close to the matter said on Wednesday.
     Casino, headed and controlled by veteran entrepreneur
Jean-Charles Naouri and owner of the Franprix and Monoprix
chains, has been plagued for years by hefty debt, declining
revenues and loss of market share in an increasingly competitive
domestic market. 
    The group, which employs 208,000 people worldwide and is
France's sixth biggest food retailer by market share, has been
selling assets to try to fix its finances, strained by debt
taken on as a result of acquisitions. It had consolidated net
debt of 6.4 billion euros at the end of last year. 
    It faces 3 billion euros of debt repayments in the next two
years, and the holding company through which Naouri controls it
is also heavily indebted.
    Casino has requested the opening of a conciliation
procedure, one of the sources said on Wednesday, meaning it is
looking to start talks with creditors, which include major
French banks BNP Paribas and Credit Agricole as well as
international hedge funds, under court supervision.
    The creditors had until 1500 GMT on Tuesday to give their
consent to begin the process, which would then be launched
officially by a French court that would also say how long the
talks would last and appoint officials to oversee them.
    Marc Senechal, a French lawyer, and Aurelia Perdereau, a
court administrator, are seen as potential mediators to oversee
the talks, the sources said.
     The process is designed to reach an agreement on Casino's
debt but also on how two proposed tie-up offers for the group -
one from billionaire Daniel Kretinsky and the other from smaller
retailer Teract  TRACT.PA  - could affect the situation.
    Kretinsky, Casino's second-biggest shareholder, has offered
to take control of Casino through a 1.1 billion-euro capital
increase. He has made his offer subject to a "substantial"
reduction in gross unsecured debt through buybacks and
conversion into equity of Casino bonds.
    Earlier this month, Standard & Poor's cut its rating on
Casino, adding further pressure on the company, whose shares are
down by over 30% so far in 2023, having fallen 58% in 2022.
    "We believe the consent solicitation process, combined with
the group's weak operating performance, fragile liquidity
position and unsustainable capital structure make a default,
distressed exchange or redemption appear inevitable within six
months," it said.
    Casino shares were suspended on May 23, pending the release
of a statement. They closed at 6.76 euros on May 22.

 (Reporting by Dominique Vidalon; Editing by Silvia Aloisi and
Conor Humphries)
 ((dominique.vidalon@thomsonreuters.com; +33149495432; Reuters
Messaging: dominique.vidalon.reuters.com@reuters.net))