Mass-market retailer Groupe Casino has confirmed that it has received a preliminary letter of intent (LOI) from a group of investors to help strengthen its capital position.

The LOI outlines a proposal from Xavier Niel, Matthieu Pigasse and Moez-Alexandre Zouari to boost the equity of Groupe Casino Guichard Perrachon by up to €1.1bn ($1.19bn).

The investors will initially provide funds of €200m to €300m. The remaining amount is to be subscribed by partners associated with their project.

In a statement, Groupe Casino said that these partners may include current creditors who are interested in reinvesting in the capital of the company.

Groupe Casino said: “At this stage, this is not a firm offer but a preliminary expression of interest, which may not be successful. The group will study this expression of interest and keep the market informed in the event of any new material elements.”

In a separate development, Groupe Casino also received a confirmation letter from holding company Fimalac Group for potential participation of €150m in the capital increase proposal from EP Global Commerce.

These developments come after the supermarket chain officially started court-backed negotiations with its creditors last month.

Groupe Casino is headed and controlled by Jean-Charles Naouri. It is one of the leading food retailers, with a network of more than 11,500 stores across France and Latin America.

The retailer had consolidated net debt of €6.4bn as of the end of fiscal year 2022, up from €5.9bn in 2021.

In the first quarter of fiscal 2023, the company generated €5.4bn in consolidated net sales, up 1.0% on a same-store basis compared to the same period a year ago.