Casino-Guichard: Casino’s creditors are getting impatient, the distributor keeps screwing on the stock market

(BFM Bourse) – Casino floats on the stock exchange. The distributor’s title falls to a new all-time low as Casino’s key creditors worry about its debt. They want strong measures to accelerate the group’s restructuring, BFM Business revealed.

Fall never ends for Casino. At 8.83 euros around 3:15 p.m., down more than 6.8% from the previous day, the distributor’s stock is simply trading at levels never reached before – at least in “recent” stock market history (let’s go back to 1999, but the Saint-Etienne company was listed on the stock exchange at the beginning of the 20th century). Since January, the stock has plummeted 62%

The financial situation of the casino distributor, which is worth less than a billion euros on the stock exchange, is again on the table. The group, which has been in financial difficulties for several years, has been pursuing a €4.5 billion plan to sell assets deemed “non-strategic” since 2018. The deadline originally set for March 2021 has been pushed back “to the end of 2023 at the latest” as the implementation of this plan has been delayed due to the pandemic. With the next sale of its subsidiary GreenYellow, the group should get back 600 million euros.

A heavy debt to bear

But this sale will not allow Casino to repay a debt that continues to grow. It will peak in the first half of 2022 at EUR 7.5 billion, as BFM Business emphasizes. Investors are skeptical about the Saint-Etienne group’s ability to meet its debt reduction commitments. Including its main banks, which are getting seriously impatient. Crédit Agricole, BNP Paribas and Natixis are behind the scenes pushing the retailer to accelerate its restructuring, BFM Business explains.

The divestitures of walls and non-strategic subsidiaries are no longer enough to silence the “silent” murmurs of creditors. The latter are now calling for the pace of the sale of subsidiaries in South America to be accelerated. “In January 2024, a debt of 800 million euros has to be repaid and this time the banks will not postpone the deadline,” adds BFM Business.

The high-leverage arrangement that allowed Jean-Charles Naouri to control Casino through a cascade of holdings eventually showed its limitations. The weight of the debt was so high in 2019 that it resulted in parent company Rallye being placed under trial. Casino was then not affected. “Now the whole galaxy is under attack from investors while the group is now worth less than a billion euros on the stock exchange. And the French banks, which have mortgaged all floors of the building, are stuck,” reveals BFM Business.

Two options under consideration

Several banks maneuver to present strategic options related to casino. They would focus “for a realignment on France with Monoprix, Franprix and CDiscount”. “The strongest way would be to support the group with one of its competitors, Carrefour or Auchan,” the only way “to get as much money back as possible,” says a manager at a casino bank.

“The other, softer option aims to forge an alliance in France, but without forcing Jean-Charles Naouri to sell Casino,” BFM Business continues. “The consolidation of French operations allows a partner to bring in cash,” a relative of the CEO told BFM Business, whose scenario “is being seriously studied by a French bank.”

The question of 73-year-old Jean-Charles Naouri’s successor was never mentioned. Without an heir internally, the handover also occurs. Creditors also want to put “this taboo subject” on the agenda to speed up Casino’s turnaround.

Sabrina Sadgui – ©2022 BFM Stock Exchange

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