French company ATOS aims to reduce its debt

Atos SE, a struggling French IT company, is seeking to secure 600 million euros in cash and loans.

This move aims to finance the company's operations until 2025, based on a restructuring plan presented to creditors.

Atos is planning a significant reduction in its debt, targeting a figure of around 2.4 billion euros by 2026. It is also aiming for a five-year extension of existing debt maturities, the company on Tuesday. Bloomberg previously reported that the company was seeking at least 1 billion euros in new capital, aiming to cut its debt by about half.

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Atos, once hailed as the shining star of the French tech sector, is now facing a heavy debt load, with restructuring options running out. The company has debts of 4.7 billion euros, with 3.65 billion euros due by the end of next year. Meanwhile, attempts to sell business units to EPEI and Airbus SE by Czech billionaire Daniel Kretinsky have failed.

The company's value has fallen by more than 97% over the past seven years. A series of challenges, including supply chain constraints, accounting errors, profit warnings, and adverse market conditions, have helped wipe almost €12 billion off its market value.

Shares bonds rose on Tuesday morning in various sessions, with bonds due in 2025 gaining more than 2 cents per euro to around 26, according to price analyses by Bloomberg.

Atos announced that current shareholders and interested investors have the opportunity to submit proposals for financing either through debt or equity until April 26. Pending a final agreement, Atos has secured €400 million in medium-term financing from a group of banks and bondholders, while it has received an additional €50 million from the French state. In return, the French state will acquire a “golden share” in the company’s critical strategic supercomputer business.

Atos CEO Paul Saleh said Tuesday in a conversation with reporters that the introduction of new funds could lead to a decrease in the value of existing shares, especially if these funds are introduced as equity capital.

The company aims to regain a BB credit profile by 2026. Recently, S&P Global Ratings downgraded its debt rating to B-, six notches lower. Today, all of Atos’ debt remains unsecured. The ability of creditors to obtain greater collateral will be determined by upcoming proposals, according to Saleh.

Atos forecasts a 1.9% decline in its revenue, reaching 9.9 billion euros in 2024, expecting to return to a growth trajectory from 2025 onwards.

French Prime Minister Gabriel Attal has expressed keen interest in the future of Atos, which has significant ties to the country’s military and nuclear industries. Recently, Attal stressed that it is crucial that Atos’ strategic operations , which include providing cybersecurity services for the Paris Olympics this summer, remain under French ownership. In a recent statement to lawmakers in the National Assembly, he confirmed that the government’s priority is to ensure Atos’ financial stability.

The proposal is a crucial part of a formal restructuring process for the company, known as a negotiation with creditors under the supervision of a court-appointed arbitrator. Atos said last month that it had sufficient liquidity to cover its needs until a deal on its debt was reached and expressed hope for a comprehensive agreement by July.

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Other political parties are exploring alternatives to bailouts. Onepoint, Atos’s main shareholder, announced on Sunday that Paris-based investment firm Butler Industries would join a consortium to support Atos. The plan’s goal is to “protect and preserve the company’s assets,” the statement said.

Kretinsky is also considering a renewed takeover bid for parts of Atos, depending on the outcome of the restructuring and refinancing plan, Bloomberg reported in February.

Source: bnnbloomberg