In the race to win control for debt-laden supermarket operator Casino Guichard-Perrachon, the two bidders are working to charm creditors, the company and the government after laying out their initial plans.

The groups — 3F, formed by banker Matthieu Pigasse, telecom billionaire Xavier Niel and retail entrepreneur Moez-Alexandre Zouari, and a rival composed of Czech investor Daniel Kretinsky and Marc Ladreit de Lacharrière’s Fimalac — have until Friday to improve their bids.

Kretinsky and Fimalac are trying to get enough backing from secured creditors, as their offer involves a bigger conversion of that type of debt into equity and less participation in the new money than their rival’s proposal, according to people familiar with the matter. It’s still being discussed whether that could involve swapping less debt into equity, bigger participation from creditors in the equity injection or a mix of both.

Meanwhile, 3F is looking into ways to improve what has been the main criticism of their financial proposal: that their offer of new equity is too small, other people familiar with the matter said, asking not to be named discussing private information.

The business plan proposals differ on three main points: how to get people back into the group’s stores; the size of expansion for the franchise network — with Kretinsky-Fimalac more conservative, while 3F’s proposal is bigger but still less than the company’s suggestion for nearly 3,000 stores and focused on the regions where Casino is already strong; and who is going to lead the task. 3F is counting on Zouari’s experience —including as a Casino franchisee — while the rival bid has lined up former Lactalis and Metro executive Philippe Palazzi for the chief executive officer role, relying on current management at Franprix.

A spokesperson for Kretinsky declined to comment, while a representative for 3F didn’t immediately reply to a request for comment.

Casino said it has asked for revised offers by 9 p.m. CET on Friday, and that they’ll be assessed based partly on “the unconditional nature of the equity commitments” and “the level of liquidity available to the group following completion of the restructuring.”

Casino added that estimated second-quarter hypermarket sales are down 17% on a like-for-like basis, mainly due to price cuts. Sales at Cdiscount stores are expected to be down 22% like-for-like.

The group now expects full-year French post-lease earnings before interest, tax, depreciation and amortization to be below €300 million ($334 million), down from €440 million in a business plan presented June 26, it said in a statement.

The rival bids are the end game in Casino’s long-running collapse under a mountain of debt. The company has been seeking since 2018 to cut borrowing via asset sales, but its concentration in areas heavily reliant on tourism backfired during the pandemic and a strategy to raise prices more than its competitors added to Casino’s woes more recently.

With the company struggling to generate enough cash, Casino in May entered into court-supervised talks with creditors and other stakeholders — including the French state — to restructure its balance sheet. The proposals would involve new equity investments from the two bidders and others and the conversion of a significant chunk of the company’s debt into equity.

Read more: Billionaires Lay Out Rival Plans to Rescue Troubled Casino

Dilution

Under the restructuring, existing shareholders would be left with almost nothing and Casino’s chairman and chief executive officer, Jean-Charles Naouri, would lose his controlling stake. Nonetheless, Casino shares soared as much as 12% Wednesday after Les Echos reported that the bidders would improve their proposals.

In the meantime, the French grocer is pursuing a business plan designed around its smaller, premium supermarkets in city centers in Paris and Lyon and on the Cote d’Azur. Even though it’s keeping its cash-burning hypermarket operations in France, the group is planning to sell assets such as its business in Latin America.

Adding to the liquidity pressures, the company is getting reduced financing from suppliers, ratings firm Moody’s said this week.

French Finance Minister Bruno Le Maire said Tuesday in Parliament that both offers to recapitalize Casino were solid and that it’s not the state’s role to choose between them.

Here’s a sum of the offers presented so far:

--With assistance from James Regan.

(Updates with Casino statement starting in seventh paragraph.)

Author: Irene García Pérez and Alexandre Rajbhandari