Heavily indebted Casino announced on Friday the opening of formal negotiations with its creditors to resolve its financial difficulties, at a time when the retailer is the subject of several proposed mergers.

The group, headed and controlled by businessman Jean-Charles Naouri, owner of Franprix and Monoprix, said the Paris Commercial Court had decided to open conciliation proceedings on Thursday, for an initial period of four months, which may be extended by a further month. Aurélia Perdereau (Thévenot Partners) and Marc Sénéchal (BTSG) have been appointed as conciliators.

"In the context of ongoing discussions with the Teract group and the Groupement Les Mousquetaires on the one hand, and as an extension of the proposal made to it by EP Global Commerce AS on the other, Groupe Casino considers that the conciliation procedure will provide the best possible framework for discussions with its creditors and potential investors," said the retailer in a press release.

At the end of December, the group's consolidated net debt stood at 6.4 billion euros. Casino has debts of 3 billion euros to repay over the next two years, and the holding company controlled by Jean-Charles Naouri is also heavily indebted.

The decision to enter into a conciliation procedure with creditors, which include the major French banks BNP Paribas and Crédit Agricole as well as international hedge funds, comes as Casino considers two separate merger proposals, one from Czech billionaire Daniel Kretinsky, via EP Global Commerce, and the other from Teract, a smaller retail group.

In a separate press release, Casino also announced on Friday the signature with Groupement Les Mousquetaires, owner of the Intermarché supermarket chain, of a "protocol of intent that significantly extends and expands their industrial and purchasing partnerships, and optimizes their respective networks".

The agreement provides for the transfer to Groupement Les Mousquetaires, which joined Teract's merger proposal in April, of Casino outlets in France representing around 1.05 billion euros in sales excluding VAT.

"Groupement Les Mousquetaires will also participate as a minority shareholder in the Casino group's future financing round, with an equity investment of 100 (million euros)", said Casino.

Trading in Casino shares, suspended since Monday, will resume this Friday at the opening of the Paris Bourse, the group said.

(Reported by Dominique Vidalon; French version by Camille Raynaud and Bertrand Boucey)