Retail

Casino's Potential Stake Sale In Brazilian Assai 'Saves Some Time'

Share this article

French retailer Casino has launched a study for the potential disposal of part of its stake in Brazilian cash-and-carry chain Assai as it looks to reduce its debt.

The company, which has been facing concerns over high debts and low cash flows and hopes to complete a €4.5 billion ($4.52 billion) disposal plan by the end of 2023, said a sale would raise about $500 million, depending on market conditions.

The move offers reassurance on Casino's ability to respect its covenants in the first quarter next year, leading to the closing of short positions, Clement Genelot, an analyst at Bryan Garnier, said.

"I'm not saying that all the problems of the group are resolved (...) but at least, we have saved some time," he told Reuters in a call.

"Casino saves the first ball game," analysts at JPMorgan wrote in a note, adding that the company had delivered on "the most controversial areas" of covenants and liquidity.

As part of its efforts to cut debt, Casino last week sealed the sale of its renewable energy business GreenYellow to Ardian, generating proceeds of €600 million.

Expansion Of Convenience Stores

The company is banking on an expansion of convenience stores located in city centres and its focus on e-commerce, notably home delivery through partnerships with Ocado or Amazon.

"If we take an average since the beginning of the year, we have opened a Franprix every two days and a Casino convenience store every day," chief financial officer David Lubek told reporters.

The firm's third-quarter total consolidated net sales rose 5.4% to €8.55 billion on a same-store basis from a year earlier, supported by growth in domestic and Latin American markets against an inflationary backdrop.

Carrefour, Europe's largest food retailer, raised its cash-flow target for this year as sales growth accelerated in the third quarter.

News by Reuters, edited by ESM. For more retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

Stay Connected With Our Weekly Newsletter

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our Terms & Conditions and Privacy Policy
Enjoy unlimited digital access for 30 days
Get exclusive access to the latest grocery retail & FMCG news, interviews with industry leading executives, and expert analysis on the trends shaping the sector today
Enjoy unlimited digital access for 30 days
Enjoy unlimited digital access for 30 days
Get exclusive access to the latest grocery retail & FMCG news, interviews with industry leading executives, and expert analysis on the trends shaping the sector today
Enjoy unlimited digital access for 30 days

Copyright © 2022. All rights reserved. Developed by Square1 and powered by PublisherPlus.com