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Bond Market News
Casino Guichard’s Bonds Plunge on Warning Requiring Equity Injection
June 27, 2023
Casino Guichard’s bonds plunged after the retailer warned that it requires an equity injection of at least €900mn ($981mn) and to convert its debt into equity. The retailer’s warning comes amid falling revenues from its French operations, a negative EBITDA after leases and a cash burn of €700mn. Casino has €7bn in total debt and is looking to convert at least half of it into equity with maturity extensions for the remainder. This is to ensure “sufficient headroom to execute its plan” with adequate liquidity, it said. Casino has thus far seen interest of equity injection from two groups of investors of €1.1bn each. The first is by billionaire Daniel Kretinsky who holds a 10% stake in Casino alongside French company Fimalac. The other is by telecoms businessman Xavier Niel and two business partners. Casino has €1.4bn in debt maturities due over the next 12 months and another €1.8bn due in 2025. To preserve liquidity, it has reached an agreement in principle with the French government to defer payments of about €300mn in tax and social security liabilities due between May and September.
Casino’s bonds were down over 3-4 points across the curve with its 5.25% 2027s down to trade at 10.5.
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