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, France-based firm said on Tuesday it had received two cash injection offers and 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% as at 08:41 GMT, 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 didn't 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 €900 million would be provided by Kretinsky and Fimalac.
The remaining €450 million of new equity would be provided by Casino's creditors, the source said. The investment plan also includes a proposal to convert €500 million 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 €900 million in the group.
A source close to 3F added that the €900 million in new equity would be divided between the trio of investors (€300 million) and secured creditors (€600 million).
Verge Of Bankruptcy
Under the 3F-led plan, non-secured creditors would supply an additional €600 million, lifting the total of new equity to €1.5 billion.
Casino declined to comment on terms of the equity investment plans. A spokesperson for Fimalac wasn't immediately available for comment
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 ($7 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 5 July.
Shares in Casino had plunged as much as 20% on Monday 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.