France’s Casino in €565m sale of real estate assets
Disposal is part of retailer’s plan to cut debt burden
French retailer Casino Group has announced the sale of a portfolio of real estate assets for €565m, the latest move by the group to shore up its financial position.
Casino said on Monday that it has signed an agreement with an unnamed major institutional investor for 55 Monoprix real estate assets. Monoprix is the group’s upmarket urban brand that accounts for around half of its profits in France. The net amount of the transaction is €565m for an annual rent of €27m.
Casino’s share price has slumped almost a third this year, reflecting investor concerns about its debt levels and the structural complexity with which its chief executive and controlling shareholder Jean-Charles Naouri has built the group over the past three decades.
Two weeks ago Casino’s parent company Rallye temporarily assuaged some investor concerns when it said that the group had locked in €500m in bank funding to strengthen its financial position.
The sale of Monoprix real estate is part of a €1.5bn disposal plan of non-core assets that Casino unveiled in June to help reduce the debt pile of the group. It said at the time that it expects the asset disposals to help reduce its net debt in France by around €1bn by the end of 2018.
Casino said on Monday that the deleveraging plan has realised €778m to date, and added that it has already received offers on some others assets that are included in the disposal plan and could materialise before the end of the year.
French retailers such as Casino and its rival Carrefour, the world’s second-largest retailer by revenues, have come under pressure from a multiyear price war that has eaten into their margins, and are grappling with the growing threat posed by e-commerce players such as Amazon.
A week ago Casino and Carrefour confirmed that they had been in merger talks in September. However the project hit a wall after Carrefour chief executive Alexandre Bompard refused to sign the six-month “standstill” clause demanded by Mr Naouri.