Casino has asked its creditors to consent to it to the possibility of opening up conciliation proceedings in order to “have a secure framework for discussion” to assess the various offers, most notably a proposal from its second largest shareholder who has said that his offer would be conditional on a substantial reduction in the group’s unsecured debt.

9fin clients can see the full consent solicitation request here. The deadline to vote is next Friday, 19 May 2023.

The source close to the lenders said they are still discussing the waiver. They are looking to find out when the company plans to launch the conciliation process as well as gain information rights with regards to its ongoing negotiations with various parties on offers it has received.

“Conciliation is not an issue. It’s much more [about] trying to be sure we have the right information,” they said. They added that the company has not been very transparent so far.

They pointed to the fact that the company held a shareholder meeting yesterday, but did not shed any further light on the two offers on the table. 

Casino said in a statement yesterday 10 May 2023, that despite rumours, it has no additional information to communicate regarding these negotiations. It added that the “ongoing discussions remain conditional on the conclusion of binding agreements among the parties and of which the market will be kept informed.”

It reiterated what it said in its announcement on 24 April 2023 that it wishes “to have a secure framework for discussion, to study the possibility of requesting the appointment of conciliators and has requested the agreement of certain bank creditors and bondholders for this purpose.”

On offer

The first offer on the table involves a joint venture between Casino, TERACT and Groupement Les Mousquetaires, whereby Casino will contribute its French stores to the new entity with fresh equity of €500m from TERACT and possible another €300m from Groupement Les Mousquetaires. This JV would sit outside the restricted group, leading to bondholder fears of value leakage. 

For the loans, Casino said it is considering pushing down the TLB and possibly a portion of the RCF to the JV, as reported. It is still unclear to the lenders how much of each facility would be pushed down, the source close to the lenders said. Both facilities are secured and pari passu.

“Clearly we dont know if the TERACT deal will happen or not,” the source close to the lenders said. “[We] don’t know if there will be other offers.” They speculated that hedge funds could buy into the bonds and perhaps offer to inject new money.

The second offer is from second largest shareholder, Czech businessman Daniel Křetínský, who is proposing a €1.1bn equity injection into Groupe Casino in exchange for “substantial reduction in the Group's gross unsecured debt by way of cash repurchases and conversions into equity.”

The group will have to seek consent from its lenders to waive a trigger of default under a potential change of control if it goes for Křetínský’s offer, as reported. No such request has yet to go out yet, according to the source close to the lenders.

The TLB group holds the majority of the outstanding TLBs and it has more than 10 funds in it, as reported. Hedge funds Attestor and Davidson Kempner recently bought into the RCF, as reported.

The group’s 2026 and 2027 senior unsecured bondholders are working with Perella Weinberg, as reported. The company is being advised by Rothschild and Lazard (financial) and Weil, Gotshal & Manges and Gibson Dunn (legal).

White & Case is working as legal advisor to Křetínský, who holds a 10.06 % stake. The law firm is specifically advising his holding company Energetický a průmyslový holding (EPH), a source close to the shareholder told 9fin.

Křetínský beefs up offer 

On 9 May 2023, La Lattre published an article saying Křetínský is about to make a proposal to bondholders, which offers them a recovery of 35-40% in exchange for some shares and cash. The SUN 2026 bonds are quoted at 27.7-mid and its SUN 2027 bonds are quoted at 26.5-mid, according to 9fin’s data, as shown below:

The article says Křetínský plans to implement the restructuring through an accelerated sauvegarde procedure. The article alleged that the group’s CEO Jean-Charles Naouri was on board with the proposal.

Casino however responded to this saying it “denies having given any agreement whatsoever to such offer.” It stated that at this stage it is “only taken note of this proposal and is in the process of studying it.”

Under Křetínský’s offer he himself will subscribe to €750m of the share capital increase, according to the release. This will be in exchange for an increase in his stake to 40%, according to reports. Fimalac, another shareholder in the company, will subscribe to up to €150m. Another €200m will be offered to the rest of Casino’s shareholders.

In an interview with French news outlet Le Point on 3 May 2023 the Czech businessman said: “Our offer is not contradictory with the project carried out by Matthieu, Xavier and Moez. But ours is the one that deals with Casino's first subject: its debt.”

Matthieu Pigasse is a partner at Centerview Partners, Xavier Niel is a billionaire businessman with a majority shareholding in French internet provider Iliad and Moez-Alexandre Zouari is the CEO of TERACT. The trio formed TERACT, a listed company formed last year in a SPAC deal involving Invivo, a farmers’ co-operative.

“We are providing more than 1 billion euros immediately. [This will] financially secure the group and at the same time finance its industrial investments necessary for its operational recovery in stores and in prices. Jean-Charles could retain a prominent place,” Křetínský added in the article.