Pending an agreement on its debt, Casino sinks in the first half

The French distributor Casino published poor half-year results on Thursday, when an agreement on the restructuring of the group's debt and the validation of a takeover plan by Daniel Kretinsky and Marc Ladreit de Lacharrière are expected. The group with 200,000 employees, including a quarter in France, announced Thursday that it had made a net loss of 2.23 billion euros in the first half of 2023, due in particular to depreciation, against 259 million euros a year earlier.

He also warned that "the situation to date presents uncertainty" as to its ability "to continue its operation". And this, “taking into account the legal steps remaining to be taken to implement the financial restructuring” on which the group has been working for months as part of an amicable conciliation procedure on its debt. The latter amounted to 6.1 billion euros as of June 30, including 5.5 billion in France. A year earlier at the same period, the group's debt was 5.97 billion. Casino had given the green light on July 18 to the offer to recapitalize and restructure its debt presented by billionaires Daniel Kretinsky and Marc Ladreit de Lacharrière, backed by the British investment fund Attestor.

He had set a date for Thursday to find an agreement in principle with his creditors, who must decide on the offer presented and give their approval. During a telephone press briefing on Thursday morning, Casino's financial director David Lubek reaffirmed this objective, saying he was "confident" insofar as "there is a common interest" in doing so.

The offer of the candidates for the takeover provides in particular for the contribution of 1.2 billion euros of new money as well as a major restructuring of the debt - however a little less than expected at the start. They intend to sell the group's activities in Latin America - particularly in Brazil - for which three quarters of the group's employees work. On the stock market, the action was suspended, at the request of Casino, "pending the publication of a press release". The price has melted by more than 68% since the beginning of the year and stood at 3.11 euros at the close on Wednesday evening.

If an agreement in principle is indeed ratified, Casino then plans to submit the plan for the approval of its current shareholders - whose weight will be considerably reduced, starting with the current CEO Jean-Charles Naouri - "at the latest on September 30, for a restructuring of its debt expected by the end of the year. For Daniel Kretinsky, the sooner the better, because the commercial activity of the group is in great pain.

Group sales fell in the first half of 2023, from 11.45 billion euros in 2022 (figure restated after the sale of the Brazilian brand Assai) to 10.96 billion euros (-4.2%) , in a context of high food inflation which is boosting supermarket sales. Casino puts this decline in turnover in particular on the account of price reductions of around 10% in its French supermarkets and hypermarkets, decided after a year 2022 when the group had kept a higher price positioning than the competition. .

Its net loss is the fact “mainly” of “operating losses of Casino France” on the one hand and, on the other hand, of the depreciations “of deferred tax assets in France” and of “goodwill and brands”.

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The distributor's situation is fraught with uncertainty for its employees. Daniel Kretinsky is committed to "preserve the maximum possible scope" of hypermarkets and supermarkets. According to the group's first union, Force Ouvrière, the buyers plan to "pass a large number of franchise stores", a model in which the majority of the costs are borne by the manager. The situation of Casino "augurs new transformations of which the employees could once again be the adjustment variable", also alerted the CFDT Services, for which the passage of stores in franchise would be as many "restructurings which do not say their name ". She hopes for “a real involvement of the public authorities”.

Before the National Assembly, the Minister of the Economy Bruno Le Maire declared on July 11 that the State would be vigilant on “the future of the 50,000 employees of the group” in France and on the maintenance of the historic headquarters of the group in Saint -Etienne. Employees "do not have to pay for any mistakes that may have been made by management," he said. The candidates for the takeover of Casino have indicated that they want to maintain the headquarters in Saint-Étienne and make it “the center of innovation” of the group.