The French Retailer chain, Casino, has successfully avoided bankruptcy by striking a deal for debt restructuring with its major creditors, including Czech billionaire Daniel Kretinsky.
Casino found itself on the brink of financial collapse due to accumulating debt from past acquisitions and losing market share to competing supermarkets.
On Thursday, Casino announced that a binding debt agreement had been reached with a consortium led by Kretinsky’s company, EPGC, in partnership with Casino’s largest creditor, Attestor, its second-largest shareholder, Fimalac, and the company’s secured creditors.
Casino has achieved a significant step in its financial makeover by securing approval from its primary creditors for a restructuring plan,” stated CEO and controlling shareholder Jean-Charles Naouri.
This agreement will significantly reduce the ownership stake of existing shareholders and marks the conclusion of Jean-Charles Naouri’s 30-year leadership. Naouri, who maintains control through his publicly traded holding company, Rallye, will see Casino’s ownership change hands by the end of March next year.
The announcement made on Thursday confirms the details of an initial agreement reached in July. Under this agreement, €1.2 billion (approximately $1.26 billion) in fresh capital will be infused into Casino, and the company’s debt will be reduced by €6.1 billion.
Naouri stated that this legally binding agreement establishes a positive environment for the long-term viability of Casino’s operations. It ensures the preservation of jobs, the maintenance of corporate headquarters, and the ongoing growth of Casino’s brands.
Casino’s stock has seen a significant decline this year, losing 88% of its value. However, on Thursday, after a trading suspension, the shares were up by 0.5% at 09:17 GMT.
Despite being the sixth-largest supermarket group in France now, Casino intends to continue talks with financial creditors who haven’t yet agreed to the lock-up agreement, aiming to get their support as well.
Casino also emphasized that it has until October 25th to secure approval from a commercial court for an accelerated safeguard procedure. This would allow them to move forward with the plan with the backing of secured creditors and compel reluctant creditors to comply.
The company’s Chief Financial Officer, David Lubek, mentioned that price reductions have attracted more customers to Casino’s stores, resulting in a 4% increase in foot traffic over the past four weeks.
