New setback for the Casino group. The distributor announced, this Friday, May 26, the launch of a conciliation procedure. It should last four months, and its objective will be to renegotiate the enormous debt of the group, which reached 6.4 billion euros at the end of 2022, including 4.5 linked to its activity in France. “The President of the Commercial Court of Paris has decided to open a conciliation procedure on May 25, 2023” for the benefit of Casino and its subsidiaries, including Monoprix and Franprix, “for an initial period of four months, possibly extendable by one months,” Casino said.
This procedure was an open secret, since Casino had requested on Tuesday the suspension of the listing of its shares on the Paris Stock Exchange, “pending the publication of a press release and until further notice”. The title is again listed since Friday, and it experienced a drop of more than 9% after the announcement of the conciliation.
No impact on activity
According to Casino, the challenge of this procedure is to conclude an agreement with its creditors, and thus to obtain a restructuring of its debt from its creditors. The group announces that the conciliation “concerns only the company’s financial debt. It will have no impact on the group’s relations with its operational partners (in particular its suppliers) and employees”.
The relative poor financial health of the group arouses envy. Casino is indeed in discussion with the Czech billionaire Daniel Kretinsky, but also with the food giant Invivo. Casino employs approximately 50,000 people in France, and more than 200,000 worldwide. It is notably behind brands such as Monoprix, Vival, Spar, Franprix or Leader Price. Under its own brand, the group operates 1,285 stores, ranging from convenience stores to hypermarkets.
Disposal of points of sale to Intermarché
In addition to the announcement of the opening of this conciliation procedure, Casino announced the sale of a hundred points of sale to its competitor Intermarché. These stores, “from the Casino France scope”, including hypermarkets, supermarkets and convenience stores and representing a total of 1.15 billion euros in turnover. These transfers of activity remain subject to the agreement of the employee representative bodies and the authorities. In the event of an agreement, “on the signing of the binding agreements, the Les Mousquetaires group would pay Casino an initial lump sum payment of 100 million euros, which would be deducted from the final price calculated on the market value of the assets”.
These disposals should be done in two waves. The first will concern the equivalent of 600 million euros in turnover, and should take place by the end of the year. A second, weighing 550 million euros, will take place within three years at the latest. A third optional store package is also mentioned. Intermarché has hinted that it wants to convert a number of these stores into discounters under its Neto brand. An operation that will allow Intermarché to “complete its national network”, according to group boss Thierry Cotillard.
The two groups should continue to work in harmony, since Casino has announced that Intermarché “will participate in a future group round, with an equity investment of up to 100 million euros”.