Big Eir shareholder Xavier Niel and billionaire Daniel Kretinsky compete for control of French grocery chain Casino

Heavily indebted French supermarket chain Casino has received two offers of a cash injection from groups led by prominent billionaires, including Eir shareholder Xavier Niel.

The competing proposals are part of Casino’s voluntary negotiation with creditors to restructure its debt and bring in new money in a bid to save the group now controlled by businessman Jean-Charles Naouri.

The proposal led by Czech billionaire Daniel Kretinsky and joined by French entrepreneur Marc Ladreit de Lacharrière included €1.35 billion in cash which, together with debt converted into equity, would deliver a total injection of €1.8 billion, according to a person familiar with the matter. The group had previously offered €1.1 billion.

Multimillion euro injection

The consortium’s bid is vying with that from a trio of prominent French businessmen, including telecoms tycoon Xavier Niel (a major shareholder in Irish telecoms group Eir) and retail entrepreneur Moez-Alexandre Zouari. In a statement on Tuesday, the group said it had offered to inject €900 million of cash into the group.

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That sum will be joined by contributions from others, such as €100 million from French supermarket group Intermarché and €600 million from unsecured creditors, according to a second person familiar with the matter.

Casino, which owns the Franprix and Monoprix chains, is racing to conclude an agreement with its creditors by the middle of the month to stave off the risk of default. The company is battling high debts, a rapid cash burn and falling revenues in its domestic market.

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Mr Naouri’s debt woes stretch back years. In 2019, he was forced to put Casino’s parent companies, through which he holds his 52 per cent stake in the supermarket group, into a type of bankruptcy process known as a procédure de sauvegarde. Casino is trying to avoid a similar fate.

The current restructuring process will spell the end of Mr Naouri’s control of Casino, which he built through years of debt-fuelled empire building that took the business to Latin America and pushed into industries including solar panels.

Mr Naouri and Casino have been shedding assets for years to pay down debt, but it has not been enough to offset its loss of market share in France.

Casino’s unsecured bonds are trading at a little over five cent on the euro, suggesting bondholders are braced for a near total wipeout in a restructuring.

The French government has been monitoring the situation closely given the potential fallout for Casino’s roughly 50,000 employees in the country, where it is the sixth-biggest food retailer by market share. A finance ministry committee known as CIRI that helps distressed companies has been taking part in talks over Casino’s negotiations with creditors. — Copyright The Financial Times Limited 2023