The casino comes under the control of Daniel Kratinsky and prepares a large-scale social plan
A new era for casinos. Placed in accelerated safeguards to escape its creditors in October, the Saint-Etienne distributor will change hands this Wednesday, turning the long page of its future former CEO Jean-Charles Nouri.
As the Paris Commercial Court ruled two months ago, the group will come under the control of a consortium led by Czech Daniel Kratinsky and Marc-Andre Ledret de Lechrier, two billionaires backed by the Atester investment fund. In exchange for wiping out 5 billion euros of debt, the trio will have to inject 900 million euros of the 1.2 billion euros of new money planned to relaunch the casino. The capital increase was launched on Monday and the share price will be suspended on Wednesday 27 March.
At the end of the day, following the last board meeting of the current management, the board of the new team, chaired by former Secretary of State Laurent Pietrzewski, will not only ratify the crushing of the debt running from 7.4. Billion euros at the end of 2023 only 2.6 billion euros, but also the recession of former shareholders in the capital of the new casino, the first of them, starting with Jean-Charles Nouri, forced to resign without severance pay.
Almost all supermarkets sell
The decline is huge because a shareholder who owned 1% of the casino’s share capital now owns just 0.003%, according to the group. Result: The consortium will own and control 53.7% of the capital while existing shareholders will own only 0.3%. For creditors, they will recover the balance of the capital, or approximately 46%.
The casino will be nothing but a shadow of itself. Almost all (288) hypermarkets and supermarkets will in fact be sold to Intermarché, Auchan and Carrefour by June. About 7,000 franchise-operated stores will remain C-Discount, 1,300 integrated stores (338 Monoprix, 170 Naturalia, 323 Franprix and 493 convenience stores under the Spar, Vival, Le Petit Casino brands).
With this slimming regime, casino stores will lose a minimum turnover of 4.65 billion euros, or a third of the 14.2 billion (excluding tax) generated in France in 2022. With regard to the workforce, which at the end of 2022 was 50,000 employees in France, the transfer of employees could concern about 16,000 people. The figure put forward by the unions is higher than expected due to the sale of a number of stores. Management has in fact received expressions of interest for many of those that have yet to find a buyer.
Social Plan introduced in April
This transfer will have serious consequences on support and administrative functions within the group, but also on logistics. The new general director, Philippe Palazzi, formerly of Metro and Lactalis, is working on a social plan that will be presented in April. Although the figures are still being adjusted, they already look high. Recently, unions cited 6,000 positions at risk. Although considered consistent by some close to the case, this figure represents a worst-case scenario. Management actually wants to limit losses by re-internalizing some previously subcontracted activities, particularly at the Saint-Etienne headquarters. So much so that some unionists are now “counting on 2,000 to 3,000 people,” an inter-union official told La Tribune. Not sure if management will go that far.
These job cuts include the departure of employees from stores that have not found a taker, from warehouses that are closed or employees at the Saint-Etienne headquarters where 80% of the 1,500 people are on permanent contracts (1,800 fixed-term contracts, including interns) …) in the sale Work for upcoming stores. However, management has made commitments: paying particular attention to Saint-Etienne to limit the social impact, offering higher salaries than provided for in the collective agreement and, in addition to the social plan, the departure plan volunteers. While these various plans take time to negotiate, the first departures are expected this fall.
Multiply Ebitda by 7 by 2028
The stakes are enormous: cash flow will be sufficient to last until the end of the year, and new management must quickly restore good profitability.
Buyers are aiming for more than 7 times adjusted EBITDA (gross operating surplus) after distributor rents by 2028. Estimated at 126 million euros in 2024, it should rise to 920 million in 2028. prediction
The buyers say they are planning 1.6 billion euros in investment by 2028, particularly “renovating the store base”, and hope to “develop the profitability of the brands” in particular through “competitive and stable” prices. Expansion through franchising or even “adaptation of logistics plans.”
