The rescue of cash-strapped French supermarket chain Casino is triggering a billionaires contest pitting French telecoms maverick Xavier Niel against Czech energy tycoon Daniel Kretinsky in two rival investment proposals.
The Saint-Etienne-based firm said today it had received two cash injection offers.
It added that it would make the main terms of each proposal public at the end of a meeting with creditors after market close on July 5, prompting its shares to rise sharply.
They were up by more than 16% this morning, when Casino asked Euronext to suspend the shares from trading, pending the publication of a statement by the company, the stock exchange operator said in a filing.
One offer is from EP Global Commerce, Kretinsky's investment vehicle, supported by a third billionaire, Marc Ladreit de Lacharriere, via his holding company Fimalac.
Casino did not provide the financial details of the bid led by Kretinsky, but a source close to the matter said it included a €1.35 billion investment in new equity, out of which €900m would be provided by Kretinsky and Fimalac.
The remaining €450m of new equity would be provided by Casino's creditors, the source said. The investment plan also includes a proposal to convert €500m worth of debt into shares, the source added.
The other proposal is from 3F holding, led by Niel, investment banker Matthieu Pigasse and businessman Moez-Alexandre Zouari. 3F said it would invest €900m in the group.
Xavier Niel has telecoms investments in nine countries in Europe, including in Ireland with eir.
A source close to 3F added that the €900m in new equity would be divided between the trio of investors (€300m) and secured creditors (€600m).
Under the 3F-led plan, non-secured creditors would supply an additional €600m, lifting the total of new equity to €1.5 billion.
Casino, led veteran entrepreneur Jean-Charles Naouri, is paying the consequences of years of debt-fuelled deals, that following recent losses in market share and revenue declines have put it on the verge of bankruptcy.
Compelled to speed up asset sales as it continues to bleed cash, it started talks in June with holders of its €6.4 billion debts.
A debt restructuring became unavoidable as the sixth-largest French retailer continues to burn cash and faces €3 billion of debt maturing in 2024 and 2025.
Casino said it would present the equity proposals to the board of directors later, and then to a creditors' meeting on July 5.
Shares in Casino had plunged as much as 20% yesterday to a record low after it said it would ask the commercial court for a grace period to avoid default, after some creditors refused requests not to charge interest and other fees during the conciliation period.
