France's Casino tells creditors it needs at least 900 million euros new equity

By Tassilo Hummel and Chiara Elisei

PARIS (Reuters) -French supermarket retailer Casino on Monday said it aims to conclude a debt restructuring agreement with its creditors by the end of July, telling creditors it needed an equity contribution of "at least 900 million euros" ($982 million).

Casino and the holders of its 6.4 billion euros of debt began talks this month as the group races to stay afloat through divestments and an agreement to defer taxes and social charges with the government.

In an updated strategic plan, Casino also said it aims to convert all its unsecured debt into equity in order to put its finances on a more sustainable path.

The remaining debt would be extended so that Casino has enough headroom to execute its turnaround plan, it added.

Casino shares fell by more than 10%, while some of its unsecured bonds dropped by around four cents on the euro -- a sign that recovery prospects for unsecured creditors may be worse than expected.

An investor noted that a potential agreement between Casino and unsecured creditors will depend on the price at which the debt conversion is executed and whether creditors will eventually be able to recover their money.

LIQUIDITY SITUATION

The firm's consultancy Accuracy "does not anticipate any liquidity issue" until late October, when the legal conciliation period with creditors ends, Casino said.

It added that a recently announced sale of an equity stake in Brazil's Assai would likely raise 326 million euros after costs and taxes.

Casino added that, assuming the continuation of the standstill of financial charges and debt repayments after the conciliation period and taking into account the sale of some supermarkets to the company Les Mousquetaires, there would not be any liquidity issues until the end of the 2023 financial year.

"Creditors who have not already done so have been invited to organise themselves to facilitate further discussions with the Group", Casino said.

Casino faces two 1.1 billion euro bid proposals to boost its equity base, one from main shareholder Jean-Charles Naouri teamed up with French tycoon Xavier Niel and another from billionaires Daniel Kretinsky and Marc Ladreit de Lacharriere.

Creditors are considering presenting their own proposal to try to maximise their chances of recovering their money, the investor and a source close to the situation said. However, the amount of new money needed by Casino could be too large for the creditors to provide, they added.

The updated strategy presentation also includes the divestment of assets including its GPA and Exito supermarkets in Latin America.

($1 = 0.9168 euros)

(Reporting by Tassilo Hummel and Chiara Elisei; editing by Sudip Kar-Gupta and Jason Neely)