Casino reaches agreement with Daniel Kretinsky

The ailing French retailer Casino seems to be rescued, now that it has reached an agreement in principle with its creditors and with investor Daniel Kretinsky. The Czech billionaire will take over control from the current CEO, Jean-Charles Naouri.

Capital injection

Last night, Casino reached an agreement with its main creditors and with a consortium of investors led by Kretinsky. 4.7 billion euros of debt will be converted into shares, and 1.2 billion in fresh capital is found. The operation will be completed in the first quarter of 2024.

EP Global (Daniel Kretinsky’s investment fund), Fimalac (the holding company of French businessman Marc Ladreit de Lacharrière), and British venture capital fund Attestor provide 925 million of that new capital. They were already minority shareholders in the group, and will now have 53 % of the shares.

Business plan

The new owners have immediately presented a business plan for the group: they will divest real estate and commit to an EDLP (everyday low price) strategy, invest in stores to improve service levels and the fresh range, increase marketing spend, improve the private label offering and commit to franchising. Online player Cdiscount will become a marketplace. According to the plan, revenue should rise from 15 billion in 2024 to more than 17 billion euros in 2028. The EBITDA margin should reach 6.1 % – or more than a billion euros by then.

Casino has been weighed down by heavy debt for years and published disastrous figures earlier this week, with a net loss of 2.23 billion euros and falling sales in the first half of the year. The group is the sixth largest food retailer in the French market, with banners such as Casino, Monoprix, Franprix and Naturalia. The group also has operations in Latin America.