- Court-backed talks with creditors to last up to 5 months
- Casino, Les Mousquetaires extend scope of partnerships
- Casino shares down 3% as trading resumes
PARIS, May 26 (Reuters) - French retailer Casino on Friday said it was officially starting court-backed negotiations with its creditors as the heavily indebted group seeks a way out of its financial woes while weighing two tie-up bids from wealthy investors.
Casino shares, which had been suspended since Monday evening, were down by over 3% as they resumed trading on Friday. The stock has lost over 30% so far this year.
Casino, which is headed and controlled by veteran entrepreneur Jean-Charles Naouri and owns the Franprix and Monoprix chains, has been plagued for years by hefty debt following a string of acquisitions and by declining revenues and loss of market share in an increasingly competitive domestic market.
The group said the Paris Commercial Court had decided to open a conciliation procedure for the benefit of Casino and certain of its subsidiaries for an initial period of four months, which may be extended by one month.
The talks will be overseen by court-appointed officials Aurelia Perdereau and Marc Senechal.
"The purpose of this procedure is to enable the Casino group to engage in discussions with its financial creditors within a legally secure framework, "the statement said.
Casino had a consolidated net debt of 6.4 billion euros ($7.05 billion) at the end of last year. It faces 3 billion euros' worth of debt repayments in the next two years and the holding company through which Naouri controls the company is also heavily indebted.
TIE-UP PROPOSALS
The decision to start conciliation proceedings with creditors, which include major French banks BNP Paribas and Credit Agricole as well as international hedge funds, comes as Casino considers tie-up proposals from Czech billionaire Daniel Kretinsky and from smaller retailer Teract.
Kretinsky, Casino's second-biggest shareholder, has offered to take control of Casino through a 1.1 billion-euro capital increase. He has however made his offer subject to a "substantial" reduction in gross unsecured debt through buybacks and conversion into equity of Casino bonds.
Casino said its board had set up an ad hoc committee of independent directors and members of the Audit Committee to review the tie-up proposals and monitor conciliation procedures.
Casino said in a separate statement it had signed a protocol of intent that extends the scope of its partnerships with Groupement Les Mousquetaires, owner of supermarket chain Intermarche, which in April joined the Teract tie-up proposal.
That protocol notably entails the sale to Les Mousquetaires of Casino stores in France representing around 1.05 billion euros of sales and the possibility of Les Mousquetaires injecting 100 million euros in Casino's future financing round.
($1 = 0.9084 euros)
Reporting by Dominique Vidalon. Editing by Gerry Doyle and Conor Humphries
Source: Reuters