Rallye, the heavily indebted parent company of financially struggling distributor Casino, will “approach its creditors” to arrange, if possible, its backup plan that provides for significant repayments in the coming years, according to a press release.
Rallye, as well as the cascade of holding companies (Foncière Euris, Finatis and Euris) through which the CEO of the Casino, Jean-Charles Naouri, benefited in May 2019 from a safeguard procedure to deal with their debts. This safeguard procedure provides for the reimbursement of creditors through dividends from the Casino and through the sale of so-called non-strategic assets.
Still high loss and net debt
However, the latest sale of Casino, 18.8% of the capital of the Brazilian brand Assai for an amount of 732.2 million euros, was carried out within the framework of the distributor’s debt reduction, and not of its holding companies. In addition, Casino published very contrasting financial results for 2022, with a still high net loss of 316 million euros. Casino’s net debt remains high at €4.5bn at the end of 2022 in France and €6.4bn at group level.
Rallye indicates, therefore, that it considers that “the risk factor linked to the implementation of safeguard plans is increasing”, and “it will get closer to its creditors”. The objective, according to its press release on Wednesday night, is “to examine the possibilities and possible methods of adjustment of its safeguard plan.” Rallye also specifies that its net debt amounts to 2,800 million euros for 2022. It publishes a net loss of almost 1,700 million euros for 2022 (compared to 334 million losses a year earlier), due to a provision for depreciation of Casino securities .
Discussions with Teract for a combination
Specialists are skeptical about the ability of Jean-Charles Naouri’s companies to meet their important debt payment deadlines. These uncertainties weigh on Casino’s share price, which has lost almost 70% of its value since the beginning of 2022.
In this context, Casino, which employs 200,000 people worldwide, including a large part in France, has started talks with Teract with a view to a possible merger. This recent and lesser-known group of garden center brands (Jardiland, Gamm Vert, Delbard) is a majority shareholder in InVivo, a union of 188 French agricultural cooperatives and an agribusiness giant in Europe.
Source: BFM TV
