(Feb 11): Lenders to Casino Guichard-Perrachon SA are ready to take over the beleaguered French supermarket chain in a plan of their own design.
The loan lenders’ proposal follows months of negotiations in which they rejected an initial offer from Casino. Under the plan, the company would receive €1.21 billion of capital from stakeholders to help repay the term loans and shore up Casino’s balance sheet, according to a presentation dated Feb 10.
With the proposal valuing the existing equity at close to zero, existing shareholders would need to chip in new funds to protect their stakes. Otherwise a steering committee of lenders are poised to backstop the full amount, by converting their debt to equity and stumping up cash.
The lenders’ deal would entail a more significant debt reduction compared to the plan put forward by the company, according to the presentation, seeing the term loan reinstated at €500 million rather than €800 million.
Discussions will continue, with the aim to complete its work on the restructuring by the end of the second quarter, according to the statement.
This round of negotiations comes just two years after the supermarket chain agreed to a dramatic restructuring that converted nearly €5 billion of debt to equity and handed control of the company to Czech billionaire Daniel Kretinsky and a group of creditors.
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The group had previously been helmed by Jean-Charles Naouri, who led a debt-fuelled expansion that was eventually undermined by competition with other grocers and discounters. Naouri has since been convicted for entering into a pact with a well-known stockpicker that involved paying for favourable mentions of Casino’s shares. Naouri denies the corruption allegations and his lawyers said that he is challenging his conviction.
Casino’s debtload includes a €1.41 billion term loan coming due in March 2027, and around €140 million of bonds issued by its subsidiary Quatrim. Standstills agreed for the term loan, revolving credit facility and operational financings are valid until Jan 31 and will be automatically extended until Feb 21 if unopposed. The standstill from Quatrim creditors is valid until Feb 28.
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