Casino - comment

Casino is in liquidity preservation mode as it continues through the conciliation process. Casino has agreed in principle with the French government to defer Casino’s tax and social security liabilities due between May and September which should yield c.€300m. This is in exchange for certain guarantees, including first-rank pledged and will be paid on completion date of the financial restructuring. Secondly, the conciliators will ask all financial creditors to agree for the duration of the conciliation process (until 25th October at the latest) to a standstill to interest payments which equates to €130m in mandatory principal payments. We had highlighted that €40m of the Monoprix bank lines was due in July 2023, but the statement refers to €70m of principal repayments over this period. They will seek a waiver for the potential breach of June and September covenants on the RCF and any other event of default or cross-default which may arise. 

This is normal practice during a conciliation process and isn’t of surprise. What is of surprise is the rumour that Rallye will continue to have an interest in the Casino structure post any restructuring. We fully expect Rallye’s share interest in Casino to be heavily diluted under any proposal of fresh cash at Casino. 

Casino is also selling its remaining stake in Assai in Brazil. At current prices, this should yield c.€400m of additional liquidity, subject to taxes.