The Saint-Etienne distributor on Monday publicly detailed the measures it intends to implement in order to "strengthen its liquidity" and ensure "a sustainable capital structure", after presenting them to its creditors on June 15.

It therefore plans to sell its South American brands, the Brazilian Grupo Pao de Acucar (GPA) and the Colombian Exito, even if it did not give a precise timetable in its documentation or during a telephone press briefing.

At the end of 2022, the group had nearly 1,000 stores in Brazil and more than 2,100 in Colombia, the two countries where it has the strongest presence outside France. Its presence is much smaller in Argentina (33 stores) and Uruguay (96 stores). Three-quarters of the group's workforce, which employed precisely 208,254 people as of December 31, 2022, works in Latin America.

Strong debt reduction expected

Casino also hopes to reduce its debt (6.4 billion euros of net debt) by half as part of the conciliation procedure opened at the end of May. Concretely, it hopes to convert into capital "at least all unsecured debt", i.e. more than 3 billion euros. This means that the creditors who lent him this money, instead of recovering it, would repay themselves by becoming shareholders of the group.

Czech businessman Daniel Kretinsky in Paris, January 22, 2020 © JOEL SAGET / AFP/Archives

Czech billionaire Daniel Kretinsky, already a 10% shareholder in Casino, had proposed to some of Casino's creditors to draw a line under part of Casino's debt in exchange for either cash, shares, or both. And this, up to about 40% of the receivables.

The businessman has proposed to bring 750 million euros to Casino as part of a capital increase of more than one billion euros, to which would also subscribe the billionaire Marc Ladreit de Lacharrière (Fimalac), who announced last week to hold more than 12% of the capital of Casino.

The other offer, from the trio of businessmen Xavier Niel (Free), Matthieu Pigasse and Moez-Alexandre Zouari, also plans to propose to Casino's creditors to "reinvest in capital".

The group of Saint-Etienne origin, which employs about 50,000 people in France, said it wanted to raise "at least 900 million euros", to "provide the company with the funds necessary for the implementation of its strategy" 2023-2025.

The trio of businessmen Xavier Niel, Moez-Alexandre Zouari, Matthieu Pigasse © Joël SAGET / AFP/Archives

"Preserving (the) liquidity"

Closer to home, Casino had announced the previous week several measures to "preserve its liquidity" during the conciliation procedure, which can last until October 25.

Its social security and tax charges relating to May to September were deferred, and its creditors were asked not to demand the payment of sums due, interest or repayments, while conciliation.

Casino has also sold its stake in the Brazilian cash&carry brand (wholesale sales for professionals and individuals) Assai.

At the end, the group will have "no liquidity problem by the end of the conciliation period," said an independent financial firm. It will not have one by the end of 2023, says the cabinet, provided that the freezing of financial charges and debt maturities continues "after the end of the conciliation period". Forecasts depending on the commercial activity "and the maintenance of supplier delays", says Casino.

CGT members gather in front of the Casino headquarters in Saint-Etienne, June 22, 2023 © JEFF PACHOUD / AFP/Archives

The situation of the group worries employee representatives. A rally was held Thursday in Saint-Etienne at the initiative of the CGT, Unsa and the CFDT, on the sidelines of a CSE on the sale to Intermarché of 119 stores in France, in which more than 4,000 people work. The unions present said they feared "a possible next sale to the cutting of Casino group (which) will have the sole objective of enriching the richest".

Monday's announcements were followed by a drop in the share prices of Casino (-6.13% to 7.36 euros around 09:40) and its parent company Rallye (-7.60% to 1.65 euros), in a market down 0.68%.

© 2023 AFP