Casino Says Not Part of Parent Rallye's Bankruptcy-Protection Proceedings
May 24 2019 - 2:44AM
Dow Jones News
By Max Bernhard and Anthony Shevlin
Casino Guichard-Perrachon SA (CO.FR) said late Thursday that it
isn't part of safeguard proceedings relating to its majority
shareholder Rallye.
Rallye said late Thursday that it and its subsidiaries Cobivia,
HMB, Fonciere Euris, Finatis and Euris entered into bankruptcy
protection in France. The so-called safeguard proceedings allow
debtors that are still solvent but face insurmountable difficulties
to be restructured under a court's supervision.
"These procedures do no relate to Casino group, nor its
operations, nor its employees, and do not impact the ongoing
execution of its strategic plan," Casino said. Rallye said in a
separate statement that the proceedings don't concern Casino.
Rallye said that as of December 31, 2018 it had racked up net
financial debt of 2.9 billion euros ($3.2 billion), while its
Fonciere Euris, Finatis and Euris subsidiaries had combined debt of
nearly EUR400 million. Part of this debt is subject to pledge over
Casino, Rallye, Fonciere Euris, or Finatis shares. Rallye holds
51.7% of Casino shares and 61% of voting rights.
"Rallye and its subsidiaries have...pledged nearly all of their
shares," it said.
Shares in Casino were halted earlier in the day on Thursday
following a sharp fall, which came after shares in Rallye were
suspended from the Euronext Paris exchange. Casino and Rallye said
trading of the shares will resume on Friday, May 24 at market
open.
On Wednesday the retailer confirmed that its headquarters were
investigated by European Commission officials as part of a probe
into suspected violations of antitrust rules.
Casino has been beset by a stream of bad news in recent months.
In April Standard & Poor's downgraded its rating for the
company to BB- with a negative outlook from BB with a negative
outlook. "Despite robust sales growth and the completion of its
initial EUR1.5 billion disposal plan, [Casino's] leverage remains
elevated while its cash flows remain burdened by working capital,
interest, and dividends payments," said Standard & Poor's.
Prior to this, Moody's downgraded Casino to Ba3 with a negative
outlook from Ba1 with a negative outlook.
Casino is currently undertaking an asset-disposal plan, and HSBC
analysts say the shrinking of Casino's business and its
margin-maximization strategy could both undermine the French
group's long-term strategic position.
Write to Max Bernhard at max.bernhard@dowjones.com; @mxbernhard
and Anthony Shevlin at anthony.shevlin@dowjones.com;
@anthony_shevlin
(END) Dow Jones Newswires
May 24, 2019 02:29 ET (06:29 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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