Quick comments on two news items this morning: Casino, Debenhams

All,

Quick comments on two news items this morning:

1) Debenhams board says they are "in advanced negotiations with its current lenders about additional facilities of approximately £150m. £40m of these facilities will refinance the £40m bridge facility announced on 12 February.” The word “additional" is somewhat odd in the context. Regardless, the current note holders look like they are in for more Han a 65% haircut + a significant part of the equity, implicitly valued at £50m, which should dilute Mr. Ashley’s share to but a small fraction. Mike Ashley would have to create significant value through his mere presence, play for time to show some of it by injecting further cash and cut bondholders a better deal at the end. He would have to more than just double down to do that.

2) Casino confirmed the E500m sale of 26 of its hypermarkets. Much of the cash has already travelled and only approx. E110m remain to be paid. The sale had been previously announced and is already recognised in Tomas’ model. The company reports on Thursday.

Wolfgang