French retailer Casino has sold a majority stake in Brazilian footwear and accessory maker Assai to cut its debt. The company said that it plans to use the money from the sale to reduce its net debt by €50 million ($64 million) and free up resources for strategic investments. Casino is one of France’s largest retail groups, with around 2,000 stores across France and 11 international store brands. It has been struggling since the financial crisis as shoppers have turned to budget retailers such as Zara and H&M. Assai was founded in 2007 by entrepreneur Bruno Mansur. The company manufactures shoes, handbags, eyewear, accessories, home furnishings and bedding.
French retailer Casino sells shares in Brazil’s Assai to cut debt
Casino, the French retailer, has announced that it has sold its majority stake in Brazilian-based textile company Assai to reduce its debt. The move comes as the company reports a fall in profits for the first half of 2017.
The deal will see Casino receive $30 million in cash and another $50 million worth of shares over three years. These will help to pay down its debts, which totalled €1 billion at the end of 2016.
Assai was founded in 1873 and operates across six countries. It produces fabrics and textiles for both home and industrial use, with products exported to more than 90 countries around the world.
Assai Brazil plans to use the funds to reduce its debt
Asai Brazil plans to use the funds to reduce its debt
French retailer Casino has sold shares in Brazil’s Assai to cut debt. The move comes as Assai looks to reduce its debt which stands at around BRL 550 million (£240 million). In a statement, Casino said that it had sold its stake in the company “to secure a future for all stakeholders”. It added that the proceeds from the sale would be used “to further reduce Assai’s indebtedness and improve its liquidity position”. In March, Assai received a EUR 50 million loan from France’s Cofidis bank.
The deal is a significant step for Assai Brazil, which has been struggling lately
The deal is a significant step for Assai Brazil, which has been struggling lately. Casino bought the company’s shares for $1.5 million in cash and intends to use them to reduce its debt. The company has been struggling with debts totaling $60 million, although it has increased sales by 40% this year. The sale should help the company turnaround its finances and increase its competitiveness in the Brazilian market.
The sale could help Casino avoid a bankruptcy
Casino has announced a sale of shares in Brazilian retailer Assai to reduce its debt. The move comes as the company looks to avoid bankruptcy. Casino is currently in talks with creditors to restructure its debt, but has warned that if a solution isn’t found, it may have to file for insolvency. This sale could help the company secure a more favourable deal with creditors.
Casino’s chairman and CEO said that this move was necessary to “ensure the long-term viability” of the company. While the sale will only bring in around £10 million, it’s hoped that it will allow Casino to continue operating without having to resort to drastic measures such as layoffs or closures.
This decision comes after disappointing sales figures for the company in 2017. In January of this year, Casino announced that sales had decreased by 11% compared to 2016, attributing this decrease to “the general slowdown of Brazil’s economy.” This news came just weeks after rival retailer Zara filed for bankruptcy protection in Brazil due to similar economic circumstances.
With competition from global retailers continuing to increase, particularly in Brazil where high inflation and sluggish economic growth have put pressure on consumer spending, it’s clear that Casino faces an uphill battle if it hope seeks to remain solvent into the future.
French retailer Casino has sold shares in Brazilian restaurant chain Assai to reduce its debt load. The company said that it will receive $10 million for the sale, which is expected to close by the end of the year.