Czech billionaire Daniel Kretinsky is set to take control of Casino Guichard Perrachon SA after a trio of French businessmen led by telecommunications investor Xavier Niel pulled out of the race for the troubled grocer.
(Bloomberg) — Czech billionaire Daniel Kretinsky is set to take control of Casino Guichard Perrachon SA after a trio of French businessmen led by telecommunications investor Xavier Niel pulled out of the race for the troubled grocer.Â
The 3F group, also including banker Matthieu Pigasse and retail entrepreneur Moez-Alexandre Zouari, has been competing against a consortium composed of Kretinsky and Marc Ladreit de Lacharrière’s Fimalac with offers to restructure the company’s debt and inject fresh equity.Â
The French company had asked them to submit revised bids over the weekend to select a winner by the end of July. While 3F dropped out of the race on Sunday citing a worse-than-expected financial situation, Kretinsky tweaked the terms of the bid allowing some key lenders to win better terms after most of the company’s debt will be converted into equity.Â
Attestor Capital, the main secured creditor that had supported the 3F bid, has joined the rival camp, the Niel-led group said on Sunday. Davidson Kempner Capital Management, Farallon Capital Management, Monarch Alternative Capital and Sculptor Capital Management are also backing the Kretinsky offer, one person familiar with the matter said, asking not to be named because they aren’t authorized to talk about it.Â
Officials for Casino, Davidson Kempner, Kretinsky and Sculptor declined to comment, while a representative for Farallon wasn’t immediately available for comment. Spokespeople for Attestor and Monarch didn’t immediately reply to a request seeking comment.
The company has been seeking since 2018 to cut debt via asset sales, but its concentration in areas heavily reliant on tourism backfired during the pandemic and a strategy to raise prices more than its competitors added to Casino’s woes more recently.
With the company struggling to generate enough cash, Casino in May entered into court-supervised talks with creditors and other stakeholders — including the French state — to restructure its balance sheet. The proposals involved a new equity investments from the two bidders and others and the conversion of a significant chunk of the company’s debt into equity.
Casino warned on July 12 that second-quarter sales plunged at its biggest stores and earnings will be 32% below expectations, adding urgency to the company’s efforts to restructure its debt. The company is also getting reduced financing from suppliers, adding to liquidity pressures, according to ratings firm Moody’s Investors Service.
To turn around the business, the French grocer presented a plan designed around its smaller, premium supermarkets in city centers in the Paris and Lyon regions and on the Cote d’Azur. Even though it’s keeping its cash-burning hypermarket operations in France, the group is planning to sell assets such as its business in Latin America.
Under the restructuring, existing shareholders would be left with almost nothing and Casino’s chairman and chief executive officer, Jean-Charles Naouri, would lose his controlling stake.
(Updates with details of Kretinsky’s offer from third paragraph.)
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