2023-10-05 18:18:34
By Marie Bartnik
Published 11 hours ago, Updated 1 hour ago
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The commitments made at the end of July are now set in stone. The group says it has ensured its sustainability.
The implementation of the Casino rescue plan has just reached a decisive stage. After months of work – and several sleepless nights for the negotiators in the decisive phase – the group managed to construct a binding agreement, which received the approval of its future controlling shareholder, the consortium which brought together Daniel Kretinsky, Marc Ladreit de Lacharrière and the Attestor fund, and the group’s secured creditors.
800 pages thick, the “lock up” agreement signed on Thursday sets in stone the commitments made by everyone last July. To save the group on the verge of bankruptcy, Daniel Kretinsky, Marc Ladreit de Lacharrière and Attestor have committed to providing 1.2 billion euros in new money. The agreement signed on Thursday simultaneously reduces the group’s debt by 6.1 billion euros. Two thirds of Casino’s creditors gave their agreement. “A debt restructuring of such magnitude and in such a short time is unprecedented in France”, underlines the Casino group. This agreement “creates a framework favorable to the sustainability of the group’s activities, the maintenance of employment and headquarters and the continued development of all of its brands”rejoiced Jean-Charles Naouri.
Only Casino’s unsecured creditors, who hold 1.8% of the capital, have not yet signed it. The group hopes to convince them in the coming weeks. If this were not the case, they could take legal action“but this would not impact the timetable of the debt restructuring», Specifies Yannick Piette, lawyer at Weil, Gotshal & Manges, and advisor to Casino.
A slow resumption of activity in hypermarkets
The agreement signed Thursday morning should be applicable next March. By this time, the consortium will hold between 49% and 53.7% of the capital of Casino, while the current shareholders will be “massively diluted”. Rallye, indirectly owned by Jean-Charles Naouri, will lose control of the distributor. On the operational level, Philippe Palazzi, chosen by Daniel Kretinsky, will replace the current CEO.
However, the group’s difficulties are not completely behind it. Although the activity of all its store formats is improving, the situation in hypermarkets remains very worrying. The excessively high prices charged until the start of the year scared away customers. The group has raised the bar and revised its pricing policy downwards. But the effects are slow to be felt. Over one year, volume sales of Casino hypermarkets continue to decline by 20% compared to -4% for the entire market. It was 32% a few weeks ago.
Is Casino likely to need additional liquidity between now and the change of control in March? « Today, taking into account the disposals, we do not identify any additional liquidity needs over this time horizon. », believes Yannick Piette. The group’s activity in Latin America must be sold, and a cluster of 61 stores has just been sold to the Mousquetaires group. For the future, if they want to make additional transfers, the new owners will be constrained by the agreement signed on Thursday. The sale of Monoprix or Franprix is a red line. The sale of hypermarkets and supermarkets will remain possible on a case-by-case basis if they are in deficit.
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