Last week, Casino's board approved moving forward with talks with Czech billionaire Daniel Kretinsky over a plan to inject 1.2 billion euros of new money in the distressed French retailer, paving the way for a possible debt restructuring deal with its creditors.

The agreement in principle provides for the conclusion of a binding lock-up agreement during September 2023, allowing the opening of accelerated safeguard proceedings by October 2023 and the effective completion of all the restructuring operations during the course of the first quarter of 2024, the statement said.

Casino also said it had obtained from the creditors under the Revolving Credit Facility to waive their right to claim any accelerated payment on the basis of any event of default under the financial covenants as of 30 June 2023 and 30 September 2023.

Casino reiterated that its shareholders will be massively diluted and parent company Rallye will lose control of Casino under the restructuring deal.

Kretinsky's rescue plan would bring an end to the 30-year reign of Casino CEO and controlling shareholder Jean-Charles Naouri at a time when France's traditional retail sector is adapting to the rise of e-commerce and hard-discount supermarket chains.

France's sixth-largest retailer is facing the consequences of years of debt-fuelled deals that, following recent losses in market share and revenue declines, have put it on the verge of bankruptcy.

In a further sign of a deteriorating situation, Casino reported on Thursday it plunged to an operating loss of 233 million euros came in the first half of 2023 while cash flow in France deteriorated further to negative 1.6 billion euros.

(Reporting by Dominique Vidalon; Editing by Tassilo Hummel and Lincoln Feast)