French supermarket group Casino has sold a 15% stake in its Mercialys property unit through an equity swap with an unnamed bank for €213 mln.
Casino, a major player in the French convenience and discount segments, with brands such as Spar, Monoprix, Leader Price and Naturalia, also controls Brazil’s top retailer Grupo Pao de Acucar and holds assets in Colombia.
However, investor concerns about high debt levels and negative currency issues in Brazil affecting earnings have increased pressure on the group to accelerate disposals.
The group's credit rating was slashed to junk in March 2016 by Standard & Poor. In its H1 earnings statement, Casino reported the Mercialys deal and said it had received offers for other assets meeting half of its €1.5 bn disposals target.
Excluding currency fluctuations, group operating profit rose 10.3% in the first half of the year, while its French operating profits grew 17.3%.
In a statement, Mercialys said that the transaction did not affect 'the implementation of Mercialys’ €825 mln portfolio of development projects', and that the partnership agreement between Mercialys and Casino would 'continue without amendments'. The REIT added: 'Over time, this sale will help to improve the liquidity of Mercialys’ shares'.