Casino has announced that it will be offering creditors its stake in Grupo Éxito and Brazilian retail company Grupo Pao de Açucar in exchange for debt forgiveness of up to 50%, despite the general profitability of both companies for Casino. The deal could net them an amount of debt forgiveness up to €2.9 billion ($3.2 billion USD) if creditors accept the exchange.

Groupe Casino reportedly has a sizable debt amount of €6.4 billion ($6.97 billion USD) and recently has had trouble paying debts as the company faces an increased amount of default risk and seeks a debt restructuring agreement with creditors. 

Despite this, giving up its stake in Grupo Éxito would be a big loss of income for the company, as Casino is reported to have earned a consolidated operating income of $4.9 billion USD in 2022 from the holding that had expanded to over 2,100 stores across Colombia by the end of last year. Of Groupe Casino’s 200,000 employees worldwide, three-fourths are based in South America, per reports. 

Among the supermarkets and stores under Grupo Éxito’s purview are the Surtimax supermarkets in Bogotá and Medellín, the wholesaler-focused Surtimayorista, and the Viva and Mercado Éxito shopping centers. 

Éxito and Grupo Pao de Açucar would not be the only company recently lost by Casino in its attempt to service its debts. The company also announced the sale of its 11.4% stake in Brazilian company Assai, which is valued at around €404 million ($440 million USD). 

Many of Casino’s current stockholders are also working overtime to save the company. Czech billionaire Daniel Kretinsky, who owns 10% of Groupe Casino, has offered creditors a great package of shares for the two Latin American companies in exchange for 40% of the group’s debt. He is also currently pushing for a €1.35 billion bid for the company with fellow billionaire Marc Ladreit de Lacharriere in order to put fresh capital into the company. 

Investors have been skittish of Casino’s prospects in the future, especially as they seek protection in the case of a potential default of its debts. The company’s stock has fallen over 20% in value this week since July 3 as the company’s debt risk — and lack of a clear plan to service its debt — creates pessimism among investors.

It is clear to us that residual violence must at minimum, partially be blamed on Colombia’s National Police, which has displayed a lack of leadership, and in multitudinous cases, thuggish behavior.

The levels in both quantity of incidents and in the brutality of police violence however, were shocking, and in many cases against passive protesters or bystanders. Finance Colombia generally does not editorialize, but  what Colombians have witnessed yesterday and today, as violent clashes have escalated in Bogotá is appalling and the victims as well as the broader public deserve justice.

In some places there was indeed violence, vandalism and looting that warranted an aggressive police response. However it is clear that many rouge officers, whether on their own or under violent and unprofessional leadership, literally have blood on their hands and should be held to account.

Just a few cases:

Here police can be seen beating and dragging a protester, then throwing objects at the girl recording them from a distance:

Look where violence comes from. Cops are the ones throwing rocks. #Colombia #ParoNacional #represion pic.twitter.com/85PaH9MTCQ

— no mushrooms (@nosupermario) November 22, 2019

Here a police officer kicks a girl in the face, knocking her to the ground. According to reporting by El Tiempo, they had attacked her friend and were beating him.

Abuso de poder @PoliciaColombia por parte del #ESMAD se ve claramente que la mujer estaba desarmada. Solo quería defender a su compañero. @GustavoBolivar @MafeCarrascal @ClaudiaLopez @MeDicenWally @DanielSamperO #ParoNacional21N #EstudiantesALaCalle21N #AsiVaElParo pic.twitter.com/f3bspsZ7WF

— Doña Gina ® (@Gina_Vegana) November 21, 2019

Why did you hit her? Why did you hit her? Assassins! Enraged crowds scream at police as a girl can be seen unconscious, bleeding on the street at the hands of ESMAD today in Bogotá, as unrest continues the day after the national strike.

Angry protesters in #Bogota yell at #Esmad/@PoliciaBogota after cracking an identified woman over the head. [GRAPHIC VIDEO]#ElParoSigue #22Nov #LoQueDejaElParo #ElParoContinua #ElParoNoEsDePetro #ParoNacional #ElParoSeMantiene #esmadasesino pic.twitter.com/IgwbbtyaNR

— MiKo (@Mi_Kolombia) November 22, 2019

As seen in the headline image, in Bogotá a police officer shoots a fleeing individual in the back at point-blank range:

PORTAL AMÉRICAS A ESTA HORA pic.twitter.com/64CV0f03o8

— Nicolas Quintero ⚽ (@nicolasqr_mfc) November 22, 2019

Marchers chanting “Sin Violencia” or “without violence” attacked by ESMAD, Colombia’s extremely unpopular anti-riot police:

@hrw @UNHumanRights this was what happend yesterday in Bogota (Colombia) when thousands of students were protesting peacefully and @PoliciaBogota attacked us while we were screaming #NoViolence #SinViolencia, violating our constitutional right to protest. #ParoNacional21N pic.twitter.com/GG1C30nwsq

— Felipe Solano (@DanielFsolano) November 22, 2019

Vandals loot a Surtimax grocery store in the “Patio Bonito” neighborhood, a low income area of Bogota’s sector known as Kennedy:

#Bogotá | Se reportan saqueos en una tienda Surtimax en Patio Bonito, en la localidad de Kennedy. pic.twitter.com/FO4oJ5QzJi

— EL TIEMPO (@ELTIEMPO) November 22, 2019

Vandals rob a SiTP public transport bus in Bogotá and go on a berserk joyride:

Nó es Mad Max, es Bogota incendiada por los corruptos de este país.
Para eso les sirven los fajos para generar caos y destruccion. pic.twitter.com/cYFRiYl1ML

— Faustino Asprilla (@TinoasprillaH) November 22, 2019

Below: “In the strike for peace and life, the government kicks us in the face”- by @patatadibujo on Twitter. Used with permission.

“In the strike for peace and life, the government kicks us in the face”- by @patatadibujo on Twitter. Used with permission.

The CEO of Colombia’s largest supermarket and retail chain was given the award for “his outstanding performance leading the group’s extensive portfolio of brands in several countries,” according to the Council of the Americas.

Council of the Americas has honored Grupo Exito CEO Carlos Mario Giraldo for “outstanding performance leading the group’s extensive portfolio of brands in several countries,” said the Washington-based business promotion organization. (Photo credit: Grupo Exito)

In addition to the Éxito grocery stores seen all across Colombia, the Envigado-based conglomerate’s brands and stores include Carulla, SurtiMax, and Viva. It also has retail operations across South America, including various locations in Brazil, Argentina, and Uruguay.

The honor is one of six handed out this year by the body within its annual Bravo Business Awards, which were announced today an will be formally presented in a ceremony in Miami on November 2.

Isabel de Saint Malo de Alvarado, vice president and minister of foreign affairs of Panama, has won the most prestigious award this year, the Innovative Leader of the Year Award.

“Vice President de Saint Malo de Alvarado has greatly contributed to the renewal of the public sector in her country and is a point of reference in the search for gender equality and female empowerment throughout Latin America,” said Susan Segal, president and CEO of Council of the Americas.

Four other awards will also be presented in November. Fabio Schvartsman, CEO of the Rio de Janiero-based metals and mining company Vale, has been named CEO of the Year for his work “leading one of the most successful multinational companies in the world,” said the organization in a statement.

Grupo Lala Chairman Eduardo Tricio Haro won the award for Transformational Leader of the Year, Greenberg Traurig Vice President Patricia Menéndez-Cambó took home the Visionary Leader of the Year Award, and Banco de Crédito e Inversiones CEO Eugenio Von Chrismar has been honored as Financier of the Year.

This move marks another expansion of service for Banco de Bogotá, which claims 7,340 transaction points in Colombia, including its presence in Grupo Éxito stores — including Éxito, Carulla, SurtiMax, and Super Inter — and Colsubsidio supermarkets and pharmacies.

“Our new alliance with La 14 allows us to position ourselves as the first bank with correspondent banking locations in this prestigious chain of supermarkets and stores,” said Yohana Mojica Ramón, a manager at Banco de Bogotá.

La 14 has its largest presence in the south of the country and maintains locations in 12 Colombian cities: Cali, Bogotá, Buenaventura, Manizales, Pereira, Tuluá, Palmira, Jamundí, Yumbo, Neiva, Armenia, and Girardot.

Photo: Banco de Bogotá’s headquarters in Colombia’s capital. (Credit: Jared Wade)

The transaction will enable Grupo Éxito to consolidate as the operational platform of Casino Group in South America (Colombia, Brasil, Argentina and Uruguay) and will position Éxito as the leading South American retail group, and the largest Colombian retailers based on sales. Grupo Éxito, which also operates in Colombia under the upscale Carulla and discount Surtimax brands, will reach a population of over 280 million people in the largest economies of the continent.

Carlos Mario Giraldo Moreno, Grupo Éxito CEO

“As we set out in our strategic definition, we are now making real the idea of having a “multi-Latino” Grupo Éxito together with the management of Grupo Pao de Açúcar. We love the challenge of becoming the largest retail company in South America and will work to achieve the proposed results and continue our expansion. The customer will remain at the center of the Organization in each country in which we operate,” said Carlos Mario Giraldo Moreno, Grupo Éxito CEO.

There will be no change in the management structure of GPA as a result of this transaction. Rothschild & Cie was the common financial advisor for Grupo Éxito and the Casino Group. Bank of America Merrill Lynch provided a fairness opinion to the Board of Directors of Éxito that, “as of the date thereof, and subject to the analyses, assumptions, limitations and qualifications thereof, the Aggregate Consideration to be paid by Éxito in the transaction is fair, from a financial point of view, to Éxito.”

• Total Deal Value: USD$1,826 million.
• After consolidating revenues from Brasil and Argentina, Grupo Éxito will book sales of over USD $33 billion/ COP $67.2 Billion (2014) and a leadership position in four countries: Brasil, Colombia, Argentina, and Uruguay, representing 75% of the population of the region.
• Grupo Pão de Açúcar has 2,143 stores in Brasil. It is the #1 food, #2 e-commerce vendor in the 5th largest country in the world, and #1 in South America. Its sales reached USD $27.8 billion / COP $55 Billion in 2014.
• Libertad has 27 stores in Argentina and is a leading food retailer in the region of Córdoba, with sales of USD $495 million / COP $0.99 Billion in 2014.
• Éxito purchases the shares from its own parent company, France based Casino.
• The move is seen as defensive by Casino, as Brasil’s economy slows.
• Casino owns 54.8% of Éxito

Éxito’s controlling shareholder, Casino, Guichard-Perrachon, has indicated that it may acquire additional shares in its Latin American subsidiaries in the coming months, depending on market conditions. Casino Group, which owns 54.8% of Éxito, will remain its controlling shareholder and will keep fully consolidating its subsidiaries Éxito and GPA. Éxito will finance the transaction by using part of its existing available cash and new credit facilities provided by several Colombian and international banks.

The deal, which consists of a parent essentially selling one subsidiary to another, has raised eyebrows among analysts, as it “pushes some cash directly from the international businesses into France and it moves some of the debt out of France into Latin America, much closer to the source of the cash generation,” Bernstein analysts told Reuters. Brasil’s economy continues to struggle, and while the market potential remains huge over the long term, this deal does place Éxito as a risk buffer between GPA and Casino. If GPA sales fall off, it will most directly affect Éxito.