Conciliation on the future of Casino: who expects what?

2023-06-10 11:11:05

If InVivo and Teract have finally given up on getting closer to Casino, many of them are still looking into the fate of the heavily indebted distributor: conciliators appointed by the courts, creditors, potential buyers, current management…

All will try to agree within four months of the conciliation procedure opened on June 2 by the Paris Commercial Court.

. Intermarché served, InVivo out

Intermarché has already got what it wanted: on May 26, Casino, which employs 200,000 people worldwide, including more than 50,000 in France, has agreed to sell it around a hundred stores in France.

Third French distributor, Intermarché also intends to participate in a “future round table” to recapitalize Casino but at a small level (100 million euros). The two groups have now strengthened their supply partnerships.

The union of agricultural cooperatives InVivo is even less concerned by the fate of Casino: after months of discussions, the agro-industrial juggernaut and its subsidiary Teract announced Thursday that they were abandoning their merger project.

. The current management

What room for maneuver for the current management? The commercial court appointed two conciliators, Aurélie Perdereau and Marc Sénéchal, to renegotiate an abysmal debt (6.4 billion euros for Casino and around 3 billion for its parent company Rallye) even if the board of directors of Casino is still in control of the distributor.

The CEO of the Casino group, Jean-Charles Naouri, in Paris, February 21, 2013 (AFP/Archives – Eric PIERMONT)

Casino CEO Jean-Charles Naouri intends to remain one of the major players in this reconciliation. The latter and the agreement with Intermarché “are part of our strategy to build the future of Casino”, he wrote in a recent letter to group employees.

Since then, however, the 74-year-old executive has spent a day in police custody in a case of price manipulation and alleged insider trading. Although he was eventually released without charge at this stage, his image was affected.

. The creditors

Big banks, investment funds, institutional players… Who will want to convert the debts into capital of a distributor in difficulty? Who will lose everything? Who can put back to the pot?

Czech billionaire Daniel Kretinsky during the Europa League Conference final won by English club West Ham, in Prague on June 7, 2023 (AFP - Vlastimil Vacek)
Czech billionaire Daniel Kretinsky during the Europa League Conference final won by English club West Ham, in Prague on June 7, 2023 (AFP – Vlastimil Vacek)

Czech billionaire Daniel Kretinsky, who intends to take control of Casino, has offered some creditors to write off part of the debt in exchange for either cash or shares or both. And this, up to about 40% of receivables.

New asset disposals, particularly in Latin America or the e-tailer CDiscount, could also contribute to debt reduction.

According to several sources, certain creditors of Casino are also debt holders at the level of the holding companies which are also the subject of a conciliation procedure. For them, the losses could be even more significant.

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. The conciliators

In this very sensitive case, the conciliators have the task of ensuring the continuity of the Casino group, in a form that remains to be determined.

“The question for them is not to know in absolute terms how much debt should be crushed but how much the group will generate cash” to sustain its activity and meet future deadlines, observes a connoisseur of the file with the AFP.

They have four months, plus an optional one, to find a satisfactory agreement for all, under the worried gaze of employees, the CGT calling on political decision-makers to “avoid social damage”.

. The pretenders

In addition to his offer to creditors, Daniel Kretinsky proposed a capital increase of some 750 million euros which would make him the main shareholder of Casino.

This offer, conditional on a very significant reduction in the weight of the debt weighing on the distributor, is being studied within the framework of the conciliation procedure.

At the same time, three of Teract’s co-founders, Xavier Niel (Free), investment banker Matthieu Pigasse and distribution specialist Moez-Alexandre Zouari, decided, on their behalf and after the departure of InVivo, to create a financial vehicle supplemented with 300 million euros to increase Casino’s capital. They call on other actors to join them.

An Auchan supermarket in the shopping center in the La Défense district, near Paris, on April 19, 2023 (AFP - Thomas SAMSON)
An Auchan supermarket in the shopping center in the La Défense district, near Paris, on April 19, 2023 (AFP – Thomas SAMSON)

According to Le Figaro, Auchan would have invited itself into the discussions by proposing a merger with the Casino group once the possible takeover of the distributor in difficulty by Mr. Kretinsky has been concluded. Les Echos claim that the northern distributor would also have approached the Niel-Pigasse-Zouari trio.

Asked by AFP, the Mulliez Family Association (owner of Auchan) and Auchan France did not wish to comment.

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