Shares of Casino Guichard-Perrachon (CGP) plummeted on Tuesday as talks to restructure its debt continued with a consortium led by Czech billionaire Daniel Kretinsky. The negotiations are ongoing after a rival team, spearheaded by technology entrepreneur Xavier Niel, withdrew from the race to rescue the struggling French grocer.
At 08:45 GMT, CGP shares were down by 13%, trading at EUR2.73.
Last night, the embattled grocer announced that the Kretinsky-led consortium, comprising EP Global Commerce, Fimalac, and Attestor, made a revised offer over the weekend. The offer entails injecting EUR1.20 billion ($1.35 billion) in new equity into the group, with EUR275 million specifically reserved for creditors and existing shareholders.
Previously, the consortium had proposed injecting EUR1.35 billion in new equity, including EUR200 million through a rights issue. In contrast, another consortium led by French billionaire Niel, Moez-Alexandre Zouari, and Matthieu Pigasse, known as 3F Holding, had offered EUR900 million. However, 3F Holding has opted not to submit a new offer, effectively withdrawing from the race to salvage Casino.
For several months now, CGP has been grappling with declining market share in its home country and persistently high debt levels. The company’s debt stood at EUR6.4 billion by the end of 2022, compared to EUR5.9 billion by the end of 2021. Earlier this year, CGP initiated discussions with creditors to secure enough liquidity to sustain its operations.
CGP issued a warning that it could potentially default on its revolving credit line by the end of August. Such an event would trigger a cross-default on a portion of its financial debt at its operating subsidiaries.
The company aims to reach a preliminary agreement to restructure its debt pile by the end of July.