(News Bulletin 247) – Rallye, in the safeguard procedure since 2019, wants to rearrange its debt repayment plan with its creditors. The action plunges.

Rallye, the heavily indebted parent company of the distributor in financial difficulties Casino, will “get closer to its creditors” to arrange its backup plan if possible, providing for significant repayments in the years to come. An announcement that plunged the stock prices of the two entities on Thursday.

At 1:05 p.m. GMT on Thursday, Rallye shares lost nearly 30% (to 1.50 euros) while Casino shares lost 9.32% to 6.72 euros. The Casino title had hit its all-time low earlier in the day, and the distributor has lost more than 70% of its value since the start of 2022.

Rallye, as well as the cascade of holding companies (Foncière Euris, Finatis and Euris) through which the CEO of Casino Jean-Charles Naouri holds control, had benefited in May 2019 from a safeguard procedure to meet its debts . This safeguard procedure provides for the reimbursement of creditors by means of dividends from Casino, and by the sale of so-called non-strategic assets.

However, the latest sale of Casino, 18.8% of the capital of the Brazilian brand Assai for an amount of 732.2 million euros, was carried out within the framework of the debt reduction of the distributor, and not that of its holding companies. .

Net debt growing at Casino

In addition, Casino published very contrasting financial results for 2022, with a net loss still high, at 316 million euros. Casino’s net debt remains high, at €4.5 billion at the end of 2022 in France (vs. €4.9 billion at the end of 2021) and at €6.4 billion at group level (vs. 5.86 billion euros at the end of 2021). Net debt is therefore down slightly in France, but continues to grow at group level.

Rallye therefore indicates that it considers that “the risk factor linked to the implementation of safeguard plans is increased”, and “will be closer to its creditors”. The objective, according to its press release on Wednesday evening, is to “examine the possibilities and possible methods of adjusting its safeguard plan”.

Rallye further specifies that its net debt amounts to 2.815 billion euros for 2022 (i.e. a stable level compared to 2.818 billion euros at the end of 2021 and 2.839 billion euros at the end of 2020). It publishes a net loss of nearly 1.7 billion euros for 2022 (against 334 million losses a year earlier), due to a provision for depreciation of Casino securities.

Reconciliation with Teract

Specialists are skeptical about the ability of Jean-Charles Naouri’s companies to meet its important debt repayment deadlines.

In this context, Casino, which employs 200,000 people worldwide, including a large quarter in France, has entered into discussions with Teract with a view to a potential merger.

This recent and lesser-known group of garden center brands (Jardiland, Gamm Vert, Delbard) is majority shareholder InVivo, a union of 188 French agricultural cooperatives and a behemoth of agribusiness in Europe.

(With AFP)