July 22, 2019 / 6:29 AM / 4 months ago

French retailer Casino sells subsidiary Vindémia to cut debt

FILE PHOTO: A logo of French retailer Casino is pictured outside a Casino supermarket in Nantes, France, July 20, 2017. REUTERS/Stephane Mahe/File Photo

PARIS (Reuters) - French supermarket retailer Casino (CASP.PA), under pressure to reduce its high debts, has agreed to sell its subsidiary Vindemia for 219 million euros ($246 million).

With this deal, Casino has disposed of 2.1 billion euros worth of assets under a plan to cut its level of borrowing, a group spokeswoman confirmed on Monday.

In March, Casino had raised its goal for disposing of assets to at least 2.5 billion euros, seeking to achieve that by the first quarter of 2020.

Casino said on Monday it was selling Vindemia to retail company GBH. The business is the leading retailer in the Indian Ocean region, operating in Reunion Island, Madagascar, Mayotte and Mauritius.

Casino has been struggling to improve profits in a tough business climate. The company has faced concerns over its ability to generate enough cash to also pay off the debts of its parent holding company Rallye (GENC.PA).

In May, Casino Chairman and Chief Executive Jean-Charles Naouri placed Casino’s parent companies including Rallye under protection from creditors in a bid to save the group from collapse.

While Casino itself was not placed under bankruptcy protection, it was hit with downgrades that left its credit rating deeper in junk territory, with Moody’s and S&P both citing concerns over Casino’s ties to its indebted parents.

Casino announces its first-half earnings on July 25.

Reporting by Sudip Kar-Gupta and Dominique Vidalon; Editing by Jason Neely and Edmund Blair

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