Casino shares fell 35% on the Paris Stock Exchange on Thursday, after the retail group assured that “whatever the final restructuring plan” for its colossal debt, shareholders will be heavily harmed. After an initial fall of more than 35% to a historic low, the action lost another 30.94% to 5.20 euros around 9:50 a.m. Its parent company Rallye, which will “lose control” of Casino, also fell very sharply, while new money offers are expected next week.
Since the start of the year, Casino’s stock has lost nearly half of its value. In June 2019, its price had risen to 50 euros. The net debt of Casino, which entered the conciliation procedure at the end of May, amounts to a total of 6.4 billion euros and that of its parent company Rallye to around 3 billion euros. Casino, born 125 years ago, employs more than 200,000 people worldwide, including a large quarter in France.
In order to reduce its debt, the group hopes to succeed in transforming its creditors into shareholders, in exchange for the non-recovery of their money, which will lead to a massive increase in the number of shares in circulation and therefore a fall in the value of these. “Whatever the final restructuring plan, Casino shareholders will be massively diluted,” the group said in a statement on Wednesday.
While two expressions of interest have been publicly issued, on the one hand by the Czech billionaire Daniel Kretinsky, already a Casino shareholder, and on the other hand by the trio of businessmen Xavier Niel (Free), Matthieu Pigasse and Moez-Alexandre Zouari, the group hopes to “finalize an agreement in principle on the terms of the financial restructuring by July 27,” the group also confirmed in a press release on Wednesday. In a context of great concern among employees, the distributor promises to examine the offers of equity contributions “in particular” with regard to “the integrity of the group’s activities in France” and “the preservation of jobs”.