Czech investor proposes $1.2b funding in France’s Casino

BLOOMBERG

Czech investor Daniel Kretinsky proposed a €1.1 billion ($1.2 billion) equity investment in debt-laden French grocery operator Casino Guichard-Perrachon SA that could end Jean-Charles Naouri’s control over the struggling company.
Kretinsky would invest as much as €750 million in a reserved capital increase, Casino said. Under his proposal, Fimalac, another Casino shareholder, would be able to put in as much as €150 million and existing shareholders would be tapped for up to €200 million.
Casino said it will examine the plan. Kretinsky’s proposal would include cash repurchases of Casino’s debt, converting it into equity, potentially leading to a change of control and a big dilution of existing shareholders. That would require a waiver from the company’s secured creditors, Casino said.
The stock swung between gains and losses in Paris. “It remains unclear whether Mr Kretinsky declared war on Mr Naouri or emerged as his white knight,” wrote Clement Genelot, an analyst at Bryan Garnier. “If approved, these capital increases would greatly reshuffle the ownership structure with Mr Naouri losing control to the benefit of Mr. Kretinsky.”
Casino said it’s in talks with Intermarche owner Les Mousquetaires SAS to deepen their purchasing alliance and extend it to a joint venture that Casino plans with retailer Teract SA.
Sealing one or both deals could mark another escape from potential disaster for Naouri, who built a grocery empire in France and Latin America over more than 30 years with generous helpings of borrowed money.
The executive saved the debt-burdened structure from collapse in 2019 by obtaining creditor protection for the holding companies through which he controls Casino.
Kretinsky made his fortune building the largest energy group in central Europe. He has been diversifying and taking positions in a number of European and American companies such as UK retailer J Sainsbury Plc and US sneaker chain Foot Locker Inc. He is also a minority shareholder of newspaper Le Monde and TV channel TF1 in France.
Casino aims to extend its alliance with Intermarche to 2028. The troubled retailer might sell Intermarche a number of stores in France over several years representing a minimum of €1.1 billion in turnover.