Casino: financiers impose their rescue in the face of the gradual drowning of the Teract plan
An alliance with Teract as it has been imagined since January seems increasingly unlikely. The Casino group is now moving towards negotiations with its creditors, in close collaboration with Daniel Kretinsky. The time of the industrial project will come just after, which does not prevent its development behind the scenes.
Casino's creditors have until Tuesday evening, 5 p.m., to agree to enter into conciliation proceedings without asking to apply the company's case of default. If all the bankers, hedge funds and other non-net debt specialists agree, it will be a first victory for Jean-Charles Naouri's breathless group. The conciliation will then begin (decided by the company's board of directors), then a hard phase of negotiations to erase part of the group's debt.
Only Daniel Kretinsky's project has highlighted this obligation to erase the group's slates. The project initiated in January with Teract still recently consisted of stuffing most of the debt into a new holding company to keep only 2 billion euros out of 6 billion, in an entity where all the good assets such as Monoprix would be nestled. and Franprix. This option seems so unrealistic that Fitch Ratings, which downgraded Casino's rating again last week, chose to ignore it in its analysis.
Cash or shares
As in a good divorce, the phase which should open on Wednesday will therefore consist of Casino and its creditors agreeing on the terms of their "separation", under the supervision of the commercial court represented by the agent Marc Sénéchal. The creditors in question are those called "unsecured", who hold 3.6 billion euros in debt. Facing them, Jean-Charles Naouri will no longer be alone at the helm. Because it is the contribution of the 1.1 billion euros of fresh money proposed by Daniel Kretinsky and Marc Ladreit de Lacharrière which reassures these creditors. The company and its two major shareholders will therefore have to speak with one voice.
The team is working very discreetly via its lawyers (LLA of 05/16/23) to offer a nice discount. They offer creditors to crush their debt in exchange for 35 to 40% of their starting stake, instead of the 20% available on the market today. They will be offered a "mix and match", that is to say the choice to convert their debt into shares or cash, or even to opt for a mixture of the two.
Discordant communication
Faced with these very prosaic financial realities, the so-called "industrial" project carried out by the team of InVivo and the trio Xavier Niel, Matthieu Pigasse and Moez-Alexandre Zouari has appeared to be more and more complicated to implement in recent weeks. . The creation of their two companies - one with the stores, which would be controlled by Casino, and the other, called Teract Farm, controlled by Teract to ensure the supply - is difficult to convince without the contribution of substantial fresh money . However, next to the two indebted Matthieu Pigasse and Moez-Alexandre Zouari, Xavier Niel is still very discreet about his desire to align the millions. The real financier of Teract is for the moment Thierry Blandinières, the general manager of InVivo. But after the takeover of the cereal producer Soufflet for more than 2 billion euros in 2021, the European agricultural products giant no longer has its pockets filled.
The discordant communication of this quartet did not reassure observers either, starting with Jean-Charles Naouri himself. The exclusive discussions between the bankers, Rothschild for Casino and Centerview Partners for Teract, aspired to get into the hard last week. According to our information, they related to the choice of the Casino group's hundred or so stores in which the concept of Grand Marché-Frais d'ici, dear to Moez-Alexandre Zouari, could be deployed (LLA of 07/04/22). But representatives from Casino and Teract didn't seem to be able to agree on the list.
The industrial project is of course essential to the long-term survival of the company. However, it seems increasingly premature in the face of the wall of debt. As a reminder, if the Casino/Kretinsky team succeeds in seducing at least two thirds of the unsecured creditors, the Casino company could then open an accelerated safeguard (two months renewable once) to implement the agreement reached with this majority of creditors. The backup plan should then mix financial restructuring and an industrial recovery plan.
Debt again and again
It is therefore not before this summer, or even the start of the school year in September, that discussions on the industrial project will really begin. However, the vultures are already circling more or less discreetly around Casino. Auchan, Carrefour, Couche-Tard... a lot of action