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After Moody Slashes Credit Ratings, French Retailer Casino's Shares Fall In Early Trading Session Today
After Moody Slashes Credit Ratings, French Retailer Casino's Shares Fall In Early Trading Session Today
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After Moody Slashes Credit Ratings, French Retailer Casino’s Shares Fall In Early Trading Session Today

After the global credit rating agency Moody’s slashed credit ratings of the French retailer casino on Tuesday, the company’s shares fell on Wednesday. According to Reuters, the company’s shares were down 2 percent in early session trading on Wednesday.

Earlier on Tuesday, the credit rating agency brought down the credit rating for the French retailer casino by two notches. The agency cited high debt stockpile and reduced cash flow which led to reducing the credit ratings from Ba3 to Ba1.

Vincent Gusdorf, the lead analyst for the French retailer casino at Moody’s said, “ “The free cash flows generated by Casino’s French operations fell well below Moody’s previous expectations, limiting the company’s ability to reduce its gross debt despite large asset disposals.”

“Our decision also reflects the weakening liquidity and persistently high leverage of parent Rallye, which creates substantial uncertainties with regards to Casino’s future financial policy, despite some protections stemming from Casino’s listing and large minorities,” he added.

Earlier in their bid to pay off outstanding debts, the French retailer casino had announced that it would dispose of 2.5 billion euros ($2.8 billion) worth of assets by 2020. With the cut in credit ratings, the company has been complaining the Moody’s did not take into account these strategic measures the company is relying on to cut debts and improve cash flow.

Having a similar opinion about the Casino as that of Moody’s, Bernstein analyst Bruno Monteyne said “We do not feel Casino is structurally any better following their disposal plan…While asset disposals provide short-term liquidity, there will be a point beyond which the company will be hollowed out too much, or they will have run out of assets to sell.”

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Cameri Ross

Cameri Ross

Cameri is an independent and self employed person, she has expertise in digital marketing and content creation for websites and blogs. Her passion is dancing and singing, especially classical singing.

She can be reached out at: cameriross@casino.buzz

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