Casino banks are pushing for a new focus on France

The distributor’s creditors want a strategic shift next year to prepare for the 2024 deadlines. They are asking for the sale of the subsidiaries in South America as well as an alliance in France.

This time Casino can’t wait any longer. The distribution group must speed up its restructuring and take action. In two weeks, he will complete the sale of his subsidiary GreenYellow, from which he will collect 600 million euros in cash. Casino will have almost completed its €4.5 billion asset disposal plan. But it will not be able to repay its debt, which continues to rise and will peak at 7.5 billion euros in the first half of 2022.

Its main banks, Crédit Agricole, BNP Paribas and Natixis, have been waiting for the group’s debt reduction for four years. Selling buildings and non-strategic subsidiaries (such as Leader Price or Floa Bank) is no longer enough. Casino is a “site file” which relates to all the major French banks. Officially, they remain silent. But in anonymity they now want strong actions.

“The restructuring is slow and the banks are tired of seeing the years go by, the manager of one of the three lenders is impatient. We have to act next year and Latin America is an easy sell”.

The tone is changing within the banks

Its activities in Brazil, Colombia and Uruguay are worth around 2.5 billion euros. Casino reorganized them and then split them into three to sell them more easily by country. “It will be done, but it takes time to try to temporize a source in the casino’s entourage. Colombia and Uruguay can be sold in the first quarter of 2023”. Hurry up. In January 2024, a debt of 800 million euros must be repaid and this time the banks will not postpone the deadline. “All obligations with creditors will be honored,” promises a source close to the group.

But the tone has changed within the Casino banks. For four years, the pressure had been on owner and CEO Jean-Charles Naouri’s personal companies (Rallye, Euris, Finatis, etc.). Rallye, which controls Casino, is crumbling under €3 billion in debt, but Casino has so far been spared. From now on, the entire “galaxy” is targeted by investors, while the group is now worth less than a billion euros on the stock market. And the French banks, which have lent to all the floors of the building, are stuck. “Everyone is caught up in the cascades of holdings and no one has an interest in it going down, suggests another Casino banker. We need an orderly restructuring”.

Open the capital of France to a partner

According to our information, banks are conducting strategic discussions, in cooperation with Casino, about a refocusing on France with Monoprix, Franprix and CDiscount. The rest of the story is still up in the air… Several possibilities exist. The strong method would be to support the group with one of its competitors, Carrefour or Auchan. “It’s the only way to get as much money back as possible, claims a manager of a casino bank. Even though we know we will never be fully reimbursed”. And with good reason, according to several sources, French banks have posted losses on part of their loans to Casino in their accounts. This scenario does not have consensus among Casino’s creditors, who are well aware that it will favor its competitors. “We know Carrefour is watching,” adds a banking source.

The second, softer option aims to create an alliance in France, without however forcing Jean-Charles Naouri to sell Casino. The group is in the process of bringing together its three flagship brands Monoprix, Franprix and CDiscount under the same “roof”. “The group of French activities makes it possible to bring in a partner to raise cash”, explains a close friend of the CEO. This scenario is being seriously investigated by a French bank. “We are in discussions with Casino about opening the stake in France,” confirms a source close to this lender, who wishes to remain anonymous. This solution would make it possible to initiate a consolidation movement, inevitable in France, and at the same time spare Jean-Charles Naouri, who has built his empire for thirty years.

The 73-year-old chief executive has no internal heir and many of his lieutenants have left in recent months. His estate was never discussed. It is also this taboo subject that its creditors want to put on the table to speed up the restructuring of Casino.

Matthew Pechberty Journalist BFM Business

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