Casino Says Not Part of Parent Rallye's Bankruptcy-Protection Proceedings

   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 [e-mail]; @mxbernhard and Anthony Shevlin at [e-mail]; @anthony_shevlin

(END) Dow Jones Newswires

May 24, 2019 02:29 ET (06:29 GMT)

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