Paris, France – Late yesterday, it was announced that Czech billionaire Daniel Kretinsky is steering a massive €1.35 billion investment to salvage Casino, the financially struggling French retailer. This significant influx of cash outperforms a rival plan fronted by telecoms trailblazer Xavier Niel.
This proposed capital injection theoretically satisfies Casino’s self-set objective of obtaining €900 million in new equity. As the parent company of Monoprix and Franprix chains, Casino is battling to stabilize its balance sheet burdened by an unsustainable €6.4 billion debt.
Also Read: Navigating Through a Pessimistic 2023: An Examination of Southeast Asia’s Economic Performance
However, this is merely the initial phase of Casino’s comprehensive restructuring strategy. The company declared that this plan requires finalization by the end of July and necessitates an agreement with debt holders within a court-supervised process administered by the French finance ministry.
Details of the contesting offers for fresh equity investment in Casino, under which seasoned entrepreneur Jean-Charles Naouri would lose control of the company, were revealed after market closing. This followed a turbulent early trading session that resulted in the suspension of Casino shares.
Kretinsky’s investment vehicle, EP Global Commerce, is offering one proposal, backed by another billionaire, Marc Ladreit de Lacharriere, via his holding firm Fimalac. Their €1.35 billion new equity bid promises to infuse €860 million, while unsecured debt holders would contribute €290 million, and existing shareholders would invest €200 million.
In addition, all of Casino’s unsecured debt and €1.5 billion worth of secured debt would be converted into equity, effectively reducing the group’s debt by over €4.5 billion.
On the other hand, 3F holding, led by Niel, investment banker Matthieu Pigasse, and businessman Moez-Alexandre Zouari, has a separate proposal. This plan would offer €900 million of new funds, of which only half would constitute new equity, with the remainder being a new senior debt under stringent financial conditions.
Both these equity bids would trigger a governance reshuffle at Casino. Casino plans to present the two competing bids to its debt holders’ representatives at a meeting hosted by France’s finance ministry, with the potential new equity providers in attendance.
Casino’s restructuring of its debt became inescapable as the sixth-largest French retailer continues to burn through cash and faces €3 billion of debt maturing in 2024 and 2025. The retailer is suffering the fallout of years of debt-driven deals, recent losses in market share, and revenue declines that have pushed it to the brink of bankruptcy.
This news is based on Malay Mail.
