French retailer Groupe Casino said it was officially starting court-backed negotiations with its creditors as the indebted group seeks a way through its financial challenges while also weighing two tie-up bids from wealthy investors.
Casino, led and controlled by veteran entrepreneur Jean-Charles Naouri and owner of the Franprix and Monoprix chain, said the Paris Commercial Court had decided to open a conciliation procedure for the benefit of Casino and certain of its subsidiaries for an initial period of four months, which may be extended by one month.
The talks will be overseen by court-appointed officials Aurelia Perdereau and Marc Senechal.
'The conciliation procedure only concerns the financial debt of Casino Guichard-Perrachon SA and certain of its subsidiaries and will have no impact on the group's relations with its operational partners (in particular its suppliers) and its employees,' the statement said.
Read More: Groupe Casino Sees Sales Slow In First Quarter
Debt Repayments
Casino had a consolidated net debt of €6.4 billion at the end of last year. It faces €3 billion' worth of debt repayments in the next two years and the holding company through which Naouri controls the company is also heavily indebted.
The decision to start conciliation proceedings with creditors, which include major French banks BNP Paribas and Credit Agricole as well as international hedge funds, comes as Casino considers tie-up proposals from Czech billionaire Daniel Kretinsky and from smaller retailer Teract
'Casino considers that the conciliation procedure will provide the best possible framework for discussions with its creditors and potential investors,' Casino said in a statement.
Read More: Casino, Teract Expand Tie Up Talks To Intermarché Owner
Ad Hoc Committee
It said its board had set up an ad hoc committee of independent directors and members of the Audit Committee to review the two tie-up proposals and monitor the conciliation procedures.
Casino said in a separate statement it had signed a protocol of intent that extends the scope of its partnerships with Groupement Les Mousquetaires, owner of supermarket chain Intermarche, which in April joined the Teract tie-up proposal.
Casino shares were suspended on May 23, pending the release of the statement. They will resume trading this Friday.
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