Indebted retailer Casino raises 565 million euros in property sales

French supermarket group Casino said on Monday it had agreed to sell some property assets for 565 million euros (£502.5 million) to reduce debt levels that have worried investors.

Casino shares have tumbled roughly 30 percent so far this year on concerns about its debts and those of parent holding group Rallye. Research firm Muddy Waters is one of those to have raised concerns over those debts.

The stock was up 1.6 percent on Monday, making it a top performer on the Paris SBF-120 index on Monday, but one analyst said the firm needed to do more than sell real estate to boost its performance.

The company said it had signed a deal with an unnamed institutional investor to sell 55 properties connected to its Monoprix supermarket arm. Casino said it would receive the proceeds by late December.

"Casino Group confirms all of its 2018 objectives," the company said in a statement.

"Continued good operational performance and the progressive roll-out of new profitability levers will enable Casino Group to improve its retail trading profit in France in 2019 at a similar pace to 2018, including the effects of additional rents," it said.

Analysts at brokerage Raymond James, which rates the firm "market perform", said Casino needed to do more to improve its main business performance in France despite the asset sales.

"Disposals of best-in-class domestic assets are no sustainable solution to structural domestic free cash flow and deleveraging challenges, we believe. Especially in a French retail market as competitive as France," it wrote in a note.

Casino said last month it had rejected a tie-up approach from larger rival Carrefour , although Carrefour denied making such an offer.

Five banks granted Rallye a new 500 million euro credit line last month, while the asset sale by Casino has also enabled it to cut back on its debts.

Casino reported net debts of around 5.4 billion euros during its interim results in July, while the company has a current market capitalisation of around 4 billion euros.

Casino said on Monday that its deleveraging and debt-cutting plan had so far totalled 778 million euros and it had received indicative offers on further asset sales that could materialise before the end of the year.