Casino Guichard Perrachon SA reached a restructuring deal with creditors under which Chairman Jean-Charles Naouri will see his holdings in the debt-laden French supermarket operator wiped out as he cedes control to investors led by Czech billionaire Daniel Kretinsky.
(Bloomberg) — Casino Guichard Perrachon SA reached a restructuring deal with creditors under which Chairman Jean-Charles Naouri will see his holdings in the debt-laden French supermarket operator wiped out as he cedes control to investors led by Czech billionaire Daniel Kretinsky.
The grocer’s board approved the agreement with Kretinsky, partner Fimalac and creditor Attestor Capital to recapitalize the business and cut debt, according to a statement Friday. Creditors holding more than two-thirds of the company’s term loan also have given their approval, it said.
The agreement calls for Casino to enter a court-supervised restructuring process by October and complete the revamp in the first quarter of 2024.
Shareholders will be all but wiped out and Rallye SA, Naouri’s publicly traded holding company, will lose control of Casino. Rallye said late Thursday it could be forced to liquidate if the rescue deal goes through.
Casino has been hamstrung for years by stagnant sales in the highly competitive French grocery market. The company on Thursday reported an underlying net loss of €1.3 billion ($1.5 billion) in the first half of the year.
Rallye and three other Naouri holding companies above it have depended on dividends from Casino, but the business hasn’t been able to pay out cash since 2019. The holding companies were placed under protection from creditors that year.
The deal — which has already received the the backing of secured creditors including Davidson Kempner Capital Management and Farallon Capital Management — would see Kretinsky and Fimalac take a controlling stake in the firm.
Read more: Casino Set for Foreign Owner as Kretinsky Wins Support
Kretinsky will provide the majority of a €1.2 billion equity injection to bolster the company’s liquidity. More than €1.3 billion of secured debt and €3.5 billion of unsecured debt will be converted into equity.
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.
Since late May, the company has been negotiating a solution with creditors and two bidding groups in a court-supervised process known as conciliation in which the French government was also involved, given the grocer’s role in employment and food security in the country.
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