By Mauro Orru
Shares of Casino Guichard-Perrachon slumped in early Monday trading after the French grocer said it could default on part of its debt.
At 0750 GMT, Casino shares traded 15% lower at EUR3.45.
The group said that with its revolving credit line be fully drawn at the end of June, the ratio of gross secured debt to earnings before interest, taxes, depreciation, and amortization after lease payments is expected to exceed a cap that is closely watched by investors.
The company said it could be in default under its revolving credit line by the end of August, “which would result in a cross-default in respect of a part of its financial debt at the level of its operating subsidiaries.”
Casino has for months been grappling with high debt and entered talks with creditors to ensure it has enough funding available. Last week, the group said it was seeking to raise at least 900 million euros ($982.2 million) to deliver its midterm targets.
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94