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Global Credit Rating Agency Moody Downgrades French Casino’s Rating By Two Notches

Global Credit Rating Agency Moody Downgrades French Casino's Rating By Two Notches
Global Credit Rating Agency Moody Downgrades French Casino's Rating By Two Notches

The problems for the French retailer casino doesn’t seem to be ending anytime soon. While their credit ratings already at an all-time low when they had decided to sell assets worth $2.5 billion by 2020.

In a recent jolt, this time coming from the global credit rating agency Moody; citing massive debts and reduced cash flow the company’s credit rating is further downgraded by two notches to Ba3, reports financial times.

Moody’s analyst Vincent Gusdorf 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.”

According to Moody’s the company’s debt levels are over €9 billion while the cash flow from its operations in France is only about €700 million. For analysts and Bernstein, the impoverished cash flow figures were unexpected, and that the company’s strategy to dispose of assets was not working well by any chance.

Analysts said that they “don’t see an end in sight yet to the continual cash drainage in the French business, but a rather additional risk from an increasingly hollowed-out business.”

In a statement to the press, the company said that Moody downgrading their credit ratings was not accurate as they did not consider the move to sell assets to regain the cash flow and clear outstanding debts. “ The French Retailer Casino also plans to generate, beyond and above this disposal plan, free cash flow in France of €500m per year, enabling it to cover its dividends and financial expenses,” it said.

The French retailer casino has been suffering from massive debts, and with poor cash flow, it is doubtful that they could continue paying dividends. The company management has long been facing the brunt of stakeholders. However, they are pushing hard with new strategic measures to improve credit ratings.

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Harry Matthew

Harry Matthew

Harry serves as a resident reporter for Casino Buzz. He has been responsible for building the content base and forms the core reporting strategies for the website. Along with reporting, Harry is an amazing baseball player with good record at university level. He can be reached at hm@casino.buzz

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