The rating agency Fitch raised Casino’s long-term debt rating from “RD” to “CCC+” on Tuesday, explaining that it had taken this decision “following the finalization of the restructuring” of the mass distribution group, recorded at the end March.
(AFP / DAMIEN MEYER)
“We believe that Casino will still face significant challenges in 2024 and we continue to have limited visibility on the amount of liquidity that will be absorbed by the relaunch of the company,” however, indicates the Fitch agency in a press release.
The Casino group was assigned a rating of “RD” (Restricted Default) – the lowest rating after “D” (Default) in August 2023, when the heavily indebted company had not yet started its accelerated backup procedure.
“The “CCC+” rating reflects our opinion that the execution risk linked to the recovery in Casino’s commercial performance and the subsequent absorption of cash flows will initially outweigh the reduction in capital expenditure. “the company’s indebtedness after the restructuring, the improvement in liquidity and the expected proceeds from disposals”, explains Fitch.
Passed at the end of March into the hands of Czech billionaire Daniel Kretinsky, Casino at the same time recorded the “effective completion” of its financial restructuring, thus putting in place all the operations provided for by the safeguard plan approved by the commercial court .
The distributor’s debt must be reduced from 7.4 billion euros at the end of 2023 to just over 2.6 billion euros, with repayment deadlines ranging from January 2027 to the end of March 2028.
The restructuring is taking place in parallel with a reduction in its scope of activity. The distributor’s French workforce will increase from 50,000 at the end of 2022 to 28,212 after the sale of numerous stores to its competitors Intermarché, Auchan and Carrefour. Furthermore, Casino almost no longer has an international presence.
Wednesday at 10 a.m., Casino shares rose 1.41%, to 3 euro cents on the Paris Stock Exchange.