In a dramatic turn of events, French retail giant Casino is heading toward another debt restructuring barely 18 months after Czech billionaire Daniel Křetínský rescued the struggling supermarket chain from collapse. With creditors mobilizing and €2 billion in debt weighing down operations, the stage is set for what could become one of Europe's most closely watched corporate turnarounds in 2025.
Storm Clouds Gather Over Casino as Creditors Prepare for Round Two
The retail sector is bracing for another seismic shift as Casino, one of France's most recognized supermarket brands, finds itself back at the negotiating table with creditors. Less than two years after completing an ambitious €8.2 billion restructuring that saw Daniel Křetínský wrest control from longtime CEO Jean-Charles Naouri, the company is once again facing a financial crisis that threatens its viability. Major creditors, including several prominent US and European hedge funds that participated in the 2024 restructuring, have already begun signing non-disclosure agreements and preparing their demands for fresh negotiations with Křetínský's consortium.
The urgency of the situation cannot be overstated. Casino reported a staggering €210 million loss in the first half of 2025, pushing the company dangerously close to breaching critical loan covenants by 2026. The company's secured loan of €1.4 billion is currently trading at just 66 cents on the euro, reflecting market skepticism about Casino's ability to meet its obligations. Financial advisers are on standby, ready to launch formal restructuring negotiations that could determine whether this storied French retailer survives or becomes another casualty of the challenging retail landscape.
Time is rapidly running out for all parties involved. Industry insiders suggest that a deal must be finalized before the end of the first quarter of 2026 to satisfy auditors that Casino remains a going concern. Casino itself acknowledged the precarious situation in its first-half results, noting that the company would "pay specific attention to changes in its financial structure in the coming months." This diplomatic language masks a harsh reality: without swift action, the operator of beloved French brands like Monoprix and Franprix could face an existential crisis that threatens thousands of jobs and hundreds of stores across the country.
The Křetínský Gamble: How a Billionaire's Rescue Plan Unraveled
When Daniel Křetínský orchestrated Casino's rescue in March 2024, it was hailed as one of the largest and most complex restructurings in European history. The Czech energy entrepreneur and his partners injected €1.2 billion in fresh capital while executing a massive €4.9 billion debt-for-equity swap that slashed Casino's overall debt by €6.1 billion. Křetínský had strategically built an initial stake before launching his takeover bid, eventually convincing key creditors including hedge fund Attestor to back his comprehensive plan over a competing proposal from French investors. The deal leveraged new French restructuring legislation to complete the accelerated safeguard process, allowing Křetínský's consortium to secure control with a 53.7 percent stake in the reorganized company.
However, the optimism surrounding the 2024 restructuring has evaporated faster than anyone anticipated. Sources close to the situation reveal that Casino's operations were in significantly worse condition than Křetínský and his partners initially understood when they completed the takeover. While the company celebrated its first quarter of positive like-for-like sales growth in the second quarter of 2025, this modest operational improvement has been completely overshadowed by persistently negative cash flow and mounting debt covenant concerns. The company has already divested 366 stores and announced plans to eliminate approximately 3,000 jobs as part of ongoing restructuring efforts, yet these measures have proven insufficient to restore financial stability.
The strictness of Casino's debt covenants has become a major pressure point. The company must maintain a net debt to earnings ratio below 8.34 times for its core business, a threshold that became applicable at the end of September 2024. As of June 2025, Casino reported a troubling ratio of 9.75, though this represented an improvement from the alarming 14.6 figure recorded at the end of March. This deterioration is particularly striking when compared to the more comfortable 4.9 ratio the business maintained in March 2024, immediately following the restructuring. The dramatic swing reflects how quickly declining profits can destabilize even the most carefully structured turnaround plans, forcing Křetínský to confront the possibility of injecting substantially more capital just to keep his investment viable.
Legal Drama Intensifies as Naouri Faces Prison Time for Casino-Era Crimes
Adding a dramatic subplot to Casino's ongoing financial crisis, former CEO Jean-Charles Naouri is fighting for his freedom in a Paris courtroom. Prosecutors have requested a four-year prison sentence, including one year under house arrest with electronic monitoring, plus a €2 million fine for the man who controlled Casino for nearly two decades. Naouri stands accused of organized market manipulation and private corruption stemming from his actions between 2018 and 2019, when he allegedly paid financial publications editor Nicolas Miguet to disseminate favorable information about Casino to prop up the company's plummeting stock price. The prosecution has also demanded a €75 million penalty against Casino Guichard-Perrachon itself for its role in the alleged schemes.
The trial has exposed the desperate measures taken during Casino's darkest period, when mounting debt and activist short-seller campaigns threatened to destroy the company. Naouri admitted in court that signing an agreement with Miguet was "absolutely wrong from a reputational standpoint," though he claimed ignorance about Miguet's prior criminal convictions. The former CEO painted a picture of a company under siege from coordinated attacks beginning in 2015, particularly from American activist fund Muddy Waters, which had published damaging research questioning Casino's financial stability. Prosecutors dismissed Naouri's "victimization strategy" and what they characterized as conspiracy theories, arguing that "manipulation is present at every level" of the case.
Casino's current management has attempted to distance the company from Naouri's tenure, emphasizing that the retailer has undergone complete transformation under Křetínský's ownership. The company's legal director stressed that Casino now operates under court protection, faces €1.4 billion in debt as of June 2025, and has been in "constant transformation" since the ownership change. Notably, Casino has refused to set aside financial reserves for potential penalties, arguing that the elements constituting the alleged offenses are not present and seeking full acquittal. The verdict is expected in the coming months following final hearings, but the case serves as a stark reminder of the governance failures and financial engineering that led to Casino's current predicament, casting a long shadow over Křetínský's efforts to rehabilitate the brand.
The Negotiating Table: What Creditors Want and What Křetínský Can Afford
As informal discussions give way to formal restructuring negotiations, the contours of a potential deal are beginning to emerge. Industry advisers expect that any agreement will require Křetínský to inject additional capital into Casino, though the amount remains a critical point of contention. Simultaneously, creditors will likely be asked to accept write-offs on their existing debt holdings in exchange for preserving some value in their investments. Additional flexibility on interest payment schedules may also be part of the final package, as all parties recognize that Casino's current cash generation cannot support its existing debt service obligations without fundamental changes to the capital structure.
The negotiating dynamics favor neither side completely. "Křetínský will have to put in more money but the question is how much," one adviser told the Financial Times, noting that creditors' initial position will probably demand substantial new equity investment with minimal debt write-offs. The adviser predicted that negotiations will ultimately "end up somewhere in the middle," suggesting both sides will need to make painful concessions. For Křetínský, the decision to invest more capital represents a critical test of his commitment to the Casino project and his assessment of the company's long-term viability. Having already committed €1.2 billion less than two years ago, any additional investment would deepen his exposure to a struggling retail operation in an increasingly challenging market.
Creditors face their own difficult calculus. Many of the same hedge funds that accepted substantial haircuts in the 2024 restructuring now confront the prospect of further losses on their remaining positions. The fact that Casino's secured debt trades at 66 cents on the euro reflects market expectations that creditors will ultimately accept another round of write-downs rather than risk triggering a disorderly liquidation that could yield even less recovery value. The timeline pressure works in favor of reaching a deal, as neither creditors nor Křetínský wants to enter the uncertainty of formal insolvency proceedings. However, the negotiations will test whether there is sufficient value remaining in Casino's operations to justify the combined sacrifices needed from all stakeholders to achieve a sustainable capital structure.
The Broader Implications: What Casino's Crisis Reveals About European Retail
Casino's journey from retail powerhouse to twice-restructured distressed asset within two years offers sobering lessons about the structural challenges facing traditional European supermarket chains. The company's problems stem from a toxic combination of over-leverage, operational underperformance, and shifting consumer behaviors that have undermined the traditional hypermarket model. Jean-Charles Naouri's complex holding structure, which used multiple layers of highly leveraged entities to maintain control, proved catastrophic when interest rates rose and operating performance deteriorated. This aggressive financial engineering, once viewed as sophisticated corporate structuring, ultimately accelerated Casino's descent into crisis when market conditions shifted.
The speed of Casino's deterioration following the 2024 restructuring raises uncomfortable questions about the viability of traditional turnaround approaches in today's retail environment. Despite aggressive store closures, significant job cuts, and new management under Philippe Palazzi, Casino has struggled to achieve the operational improvements necessary to support even its reduced debt burden. The company's first quarter of positive like-for-like sales growth represents a modest bright spot, but persistent negative cash flow indicates that top-line improvements have not translated into sustainable profitability. This pattern suggests that Casino faces fundamental competitive challenges that cannot be solved purely through financial restructuring and cost-cutting measures.
For investors and industry observers, Casino's plight serves as a cautionary tale about the limitations of financial engineering in solving operational problems. Daniel Křetínský's reputation as a savvy dealmaker who has built an impressive portfolio of European assets now faces a significant test. If Casino requires a second major restructuring barely 18 months after the first, it would call into question the due diligence and operational planning that supported the initial €1.2 billion investment. More broadly, Casino's struggles highlight how even iconic retail brands operating essential businesses can find themselves in existential crisis when debt burdens collide with structural industry headwinds. As negotiations progress through early 2026, stakeholders across European retail will be watching closely to see whether Casino can finally achieve stability or whether this represents another chapter in the long decline of traditional supermarket operators facing modern competitive pressures.