Overview
Casino Guichard-Perrachon has announced its intention to proceed with negotiations with a consortium led by Czech billionaire Daniel Kretinsky for a potential debt restructuring deal. The move comes after a rival team, led by technology entrepreneur Xavier Niel, withdrew from the race to rescue the embattled French grocer.
New Offer from Kretinsky-Led Consortium
Late on Monday, Casino revealed that the Kretinsky-led consortium, which also includes billionaire financier Marc Ladreit de Lacharriere, presented a new offer over the weekend. The offer involves injecting €1.20 billion ($1.35 billion) of new equity into the company, with €275 million allocated to creditors and existing shareholders.
Previously, the consortium had proposed €1.35 billion in new equity, including €200 million through a rights issue. In contrast, the separate consortium led by French billionaire Niel, Moez-Alexandre Zouari, and Matthieu Pigasse had submitted an offer of €900 million. However, Niel’s consortium has chosen not to submit a new offer, effectively withdrawing from the competition to salvage Casino.
Challenges Faced by Casino
Casino has been grappling with declining market share in France and mounting debt levels. By the end of 2022, the company’s debt stood at €6.4 billion, up from €5.9 billion in 2021. To ensure its continued operations, Casino entered discussions with creditors earlier this year to secure sufficient liquidity.
The company cautioned that it could default on its revolving credit line by the end of August, which would trigger a cross-default on a portion of its financial debt within its operating subsidiaries.
Seeking a Debt Restructuring Agreement
Casino aims to reach a preliminary agreement to restructure its debt by the end of July. Trading of the company’s shares on the Paris stock exchange, which was halted upon its request, will resume on Tuesday.
