Debt concerns linger after Casino unveils refinancing
plan
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[October 23, 2019] By
Dominique Vidalon
PARIS (Reuters) - French retailer Casino <CASP.PA>'s
latest steps to shrink its debt pile will buy time for its main
shareholder but not resolve all the problems faced by the group, ratings
agencies and analysts said on Wednesday.
Casino, majority owned by Chairman and CEO Jean-Charles Naouri and whose
parent group Rallye is also in the spotlight over its debt pile, said
late on Tuesday it aimed to raise 1.5 billion euros ($1.67 billion) in
new bank loans to help repay some of its debts.
It is also in talks to extend credit lines for four years.
The company's shares were roughly flat in late morning trading, after
opening down 3%.
Barclays analysts said visibility on the refinancing of Casino's debts
coming due had improved, but they voiced concern that the plan could
increase average borrowing costs.
"The announcement also implies that Casino will continue to dispose of
its assets in the coming years, and we question whether this would
represent the strongest equity story from a long-term perspective," they
added.
![](http://archives.lincolndailynews.com/2019/Oct/23/images/ads/current/graue_19SILVERADO_101419.png)
Casino is engaged in a 4.5 billion-euro disposal plan to shrink its
debts, and is in talks to sell its Leader Price discount chain.
The company had net debt of 2.7 billion euros and its parent Rallye <GENC.PA>
2.9 billion euros at end-2018.
Along with domestic peers such as Carrefour <CARR.PA> and Auchan, it
faces intense price competition in its home market as well as challenges
from online players such as Amazon <AMZN.O>.
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![](../images/102319PIX/busine29.jpg)
A customer shops in a Casino supermarket in Nice, France, January
15, 2019. REUTERS/Eric Gaillard/File Photo
![](http://archives.lincolndailynews.com/2019/Oct/23/images/ads/current/advcarpet_lda_FHI_2019.png)
In May, Naouri placed Casino's parent companies, including, Rallye, under
protection from creditors. Talks with bankers started in September over a draft
plan that would repay debt over 10 years..
Standard & Poor's on Wednesday removed its ratings on Casino debt from
CreditWatch Negative - which is a precursor to a ratings change - saying the
refinancing plan followed other measures by Casino, such as holding off on
dividends for the next 18 months.
"The proposed refinancing transaction, if successfully executed, will allow the
group to improve debt maturity schedule and liquidity position, thereby giving
the company more time and headroom to improve cash profitability, cash
generation and reduce debt," S&P said.
S&P kept its broader "negative" outlook on Casino debt, however, saying the
outcome of the safeguard procedure on Rallye "can still indirectly damage Casino
credit standing".
Moody's downgraded its long-term corporate family rating (CFR) on Casino to B2
from B1. It also put it on review for a further downgrade in relation with the
refinancing risk.
"This reflects Moody's view that Casino's liquidity could deteriorate in the
near-term if the planned refinancing does not proceed as expected," Moody's
said. ($1 = 0.8997 euros)
(Reporting by Sudip Kar-Gupta and Dominique Vidalon, editing by Deepa Babington)
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