(Bloomberg) -- Billionaire Xavier Niel and two partners have approached the ailing French grocer Casino Guichard-Perrachon SA with a €1.1 billion ($1.19 billion) rescue plan.
Casino received a preliminary letter of intent from the trio which seeks to boost the group’s equity by as much as €1.1 billion, including up to €300 million invested directly by them, the company said Wednesday. The rest of the funds would be raised from new partners and current creditors wishing to reinvest in the company.
“This proposal would be accompanied, to the extent necessary, by an adaptation of Casino’s existing debt to its capacities and the preservation of its growth potential,” according to a statement. The offer is preliminary and may not be successful, the grocery chain added.
Shares in Casino jumped as much as 21% on the news, but remain lower by about the same amount this year.
The debt-laden retailer and its Chief Executive Officer Jean-Charles Naouri have struggled for years to shore up its balance sheet, until recently agreeing to enter court-supervised talks with creditors. Despite its difficulties, investors are circling the owner of the Monoprix and Franprix chains, drawn in part by its extensive network of stores in Paris and southeastern France.
Read More: Why Billionaires Are Circling Debt-Laden French Grocer Casino
Niel, retail entrepreneur Moez-Alexandre Zouari and banker Matthieu Pigasse said last week that they were working on a rescue plan for Casino following the end of exclusive discussions between the grocer and retailer Teract SA, whose shareholders include the three investors and French agricultural firm InVivo.
Czech businessman Daniel Kretinsky, who already owns a stake of about 10% in Casino, has separately offered to lead a €1.1 billion equity injection. That proposal is conditional on Casino slashing its €3.6 billion of unsecured borrowings, through bond buybacks and a conversion of debt into equity. His offer will be discussed as part of the so-called conciliation talks with creditors.
(Adds shares, background)
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