Commercial Court Approves Rescue Plan of Casino Group Led by Czech Billionaire Daniel Kratinsky
Casino, France’s seventh-largest supermarket group by market share, found itself on the brink of bankruptcy after years of debt-financed acquisitions and recent losses of market share to its rivals.
A Paris commercial court on Monday gave the green light to Czech billionaire Daniel Kratinsky’s plan to bail out French distributor Casino, in serious financial trouble, as part of an expedited bailout process, a consortium made up of EP Equity Investments, Fimalec and Atester said.
“The Consortium (…) welcomes the decision of the Commercial Court of Paris to respond favorably to the proposal for an accelerated safeguard plan formulated for the takeover of the casino”He said in a press release. “From April, the management team, led by its general manager Philippe Palazzi, will implement an ambitious plan of restructuring, investment and modernization to establish the growth of the group’s brands”It is added.
Payment is about to stop
Casino, France’s seventh-largest supermarket group by market share, found itself on the brink of bankruptcy after years of debt-financed acquisitions and recent losses of market share to its rivals. Existing shareholders in the Stephanois group will be massively diluted as part of a restructuring operation that will end Jean-Charles Nouri’s thirty-year reign over the company, which he controlled through his holding company Rallye.
A consortium led by Kratinsky will own and control 53.7% of the casino’s share capital under the bailout agreement, which provides for an injection of 1.2 billion euros of new money into the casino as well as a 6.1 billion euro reduction in the group’s debt.
The Commercial Court of Paris has extended the company’s expedited protection period until February 25. Casino, which is looking to stem losses from its major hypermarkets and gain liquidity, signed an agreement last month with Intermarche’s parent company, Auchan Retail, and Groupement Les Mousquetaires to sell 288 stores in France. In early February, Groupe Les Muscoutères replaced Carrefour with the acquisition of 25 stores.
The sale, which has fueled union fears of a possible breakup of the group, is expected to leave Casino with the high-end Monoprix brand as well as Franprix, which also focuses on city center stores. On the Paris stock exchange, casino shares rose 3.5% after the green light for the rescue plan was given.
