Shares in French supermarket chain Casino fell by as much as 20% on Monday after the retailer warned it was facing an increased default risk.
Casino needed to ask a court to grant it a grace period to protect the debt-laden retailer from potential default as it tries to reach a debt restructuring agreement with creditors.
Casino and the holders of its €6.4 billion of debt began talks in June as the group races to stay afloat by converting a large part of its debt into equity, as well as through divestments and an agreement to defer taxes and social charges with the government.
Its latest request became necessary given that some creditors have not agreed yet to waive their right to ask for an immediate payment of their claims following an event of default.
Casino and the holders of its €6.4 billion of debt began talks this month as the group races to stay afloat through divestments and an agreement to defer taxes and social charges with the government.
Casino Statement
Intermediaries in the talks had asked creditors to waive their right to claim any accelerated payment on the basis of any event of default. But such a waiver was "not obtained from holders of (Casino Group’s) Senior Unsecured Notes due 2026 and 2027", Casino said in a statement on Monday.
"As such, a cross-acceleration may be triggered under these notes in the case of a suspension of payments of debts (...)", the company added, saying this is why it would now ask the commercial court for a deadline extension.
"For creditors who have already refused or are refusing the conciliators' requests, the Group will take all necessary measures to ensure the same treatment for the relevant creditors and preserve its liquidity for the duration of the conciliation proceedings."
Prosol Partnership
Separately, on Friday, Groupe Casino said that it had entered into a memorandum of understanding with Prosol, which operates the Grand Frais fresh food chain, to form a strategic partnership.
Under the partnership, Prosol will introduce its 'Fresh' concept to Casino's hypermarkets, supermarkets, and select Monoprix stores.
The parties intend to finalise the necessary agreements to commence this partnership by 24th July 2023 at the latest.
News by Reuters, edited by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.
