Retailer Casino's shares fall after interim dividend cancelled, rating cut (updated)

Finatis SA

29/05/2019 09:16

* S&P cuts debt rating to B from BB-
    * Casino scraps interim dividend

 (Adds fund manager comment and more detail)
    By Sudip Kar-Gupta
    PARIS, May 29 (Reuters) - Casino Group's  CASP.PA  shares
fell on Wednesday, after the indebted French supermarket
retailer cancelled its interim dividend and suffered a new
credit ratings downgrade.
    Casino's shares were down 3.5% in early trade.
    The shares of Casino's parent holding company Rallye
 GENC.PA  also initially fell before recovering, although Rallye
remains down nearly 60% so far in 2019 due to its debt problems,
while Casino shares are down nearly 15%.
    Late on Tuesday, Casino said it would not pay an interim
dividend as it would be focusing instead on cutting its debts,
while S&P cut its credit ratings on Casino two notches deeper
into junk status to B from BB-.
    Analysts have said that the group could slash its full-year
dividends to preserve precious cash-flow.
    Last week, a Paris commercial court placed Rallye under
protection from its creditors for at least six months.
 urn:newsml:reuters.com:*:nL5N2300TA
    Casino has been selling off assets to cut its debts.
Cancelling the interim dividend would also help it preserve cash
and use that money to pay off debts, but analysts nevertheless
remained wary of investing in the stock.
    "There is no reason to buy Casino. It's a complicated
affair, with their debts, and the supermarket retail sector in
general is under pressure due to fierce competition," said
Jerome Schupp, fund manager at Swiss investment firm Prime
Partners.
    Rallye has net debt of 2.9 billion euros ($3.2 billion) and
Casino has net debt of 2.7 billion euros.
    Rallye's main asset is its 51.7% stake in Casino. Rallye in
turn is controlled by Fonciere Euris, Finatis and Euris, all in
the hands of Casino chairman and CEO Jean-Charles Naouri.
    Under the safeguard procedure the servicing of bank and bond
debt is suspended while the group works on a plan to reorganise
its debt and potentially reschedule it by up to 10 years.
    ($1 = 0.8968 euros)

 (Reporting by Sudip Kar-Gupta;
Editing by Leigh Thomas and Susan Fenton)
 ((sudip.kargupta@thomsonreuters.com; +33 1 49 49 53 84;))