(News Bulletin 247) – The title of the Saint-Etienne distributor had been suspended since Wednesday, pending an important agreement on the restructuring of its debt with its main creditors.

Casino announced Thursday that it had signed a “lock-up” agreement on the restructuring of its debt with its main creditors, including Czech billionaire Daniel Kretinsky, in order to avoid bankruptcy.

The group thus confirms the agreement in principle concluded at the end of July with EP Global Commerce and Fimalac – the respective companies of Daniel Kretinsky and Marc Ladreit de Lacharrière – as well as with Attestor and creditors holding more than two thirds of “Term Loan B” with a view to strengthening its equity and restructuring its debt.

The financial restructuring agreement provides for a contribution of equity as well as a reduction in the group’s net debt of 6.1 billion euros, Casino indicates in a press release.

Casino shares, which have lost 88% of their value since the start of the year, were suspended on Wednesday at the company’s request. Trading resumed on Thursday at 11:00 a.m. and the stock is currently up 7% around 1:45 p.m., while the SBF120 is up 0.3%.

A framework favorable to the sustainability of Casino

According to Chairman and CEO Jean-Charles Naouri, the agreement “creates a favorable framework for the sustainability of the group’s activities, the maintenance of employment and headquarters and the continued development of all of its brands” .

However, the proposal of the group and the consortium was not accepted by the holders of high yield bonds (high yield, Editor’s note) and EMTN (a debt instrument issued by companies, Editor’s note) mentioned above, specifies Casino, and discussions continue with unsecured creditors.

At the end of the planned restructuring operations, the consortium will hold control of Casino via a special purpose vehicle (SPV), and Daniel Kretinsky’s EP Equity Investment III will control said SPV.

“Nothing new” for an analyst

Casino shareholders will be massively diluted and Rallye will lose control of Casino, as planned.

“Casino’s announcement only confirms the main terms of the restructuring expected in 2024. There is nothing really new,” notes Clément Genelot, analyst at Bryan Garnier.

The analyst says he remains concerned about “Casino France’s liquidity depletion rate” and the low amount of the upcoming liquidity injection in the first half of 2024.

“Kretinsky will have difficult decisions to make: going back on his promises not to sell assets in France, and/or launching a new capital increase,” estimates Clément Genelot.

The distributor, which is now the sixth largest supermarket group in France, said it plans to continue discussions with creditors who have not yet accepted the “lock-up” so that they also subscribe to it.

(With Reuters)