Atos takes big steps in financial restructuring process

Atos has in recent weeks taken important steps in its financial restructuring process. According to company, these steps have safeguarded its immediate and longer-term future.

The French IT services giant has been working on an extensive financial restructuring process for months. The Paris-listed group is struggling with high debts, and is under pressure to either land new forms of financing, find a new owner, or sell off parts of the business.

After potential acquisitions by counterpart Onepoint and a Czech billionaire fell through, Atos has moved quickly to bring on board funds to cover its operational costs and debt payments, and secure its long-term future.

In the past weeks, a series of agreements have been closed on this front. Yesterday, banks and existing shareholders committed approximately €1.7 billion in financing to Atos. The sum is evenly split between the two groups, each committing €838 million.

In return, Atos will convert €2.9 billion of debt into shares, meaning that the banks and shareholders will effectively gain financial control over Atos. The implementation of this agreement will result in a massive dilution of capital for existing shareholders. The share price of Atos had already lost 90% of its value in the past year, and in recent weeks, the price was notably volatile as it moved along with reports and updates.

One of the key developments came mid-June, when Atos accepted an offer to be acquired by Onepoint. But two weeks after announcing the proposed takeover, Onepoint pulled its bid back.

The news sent Atos back to the drawing board, after which Atos CEO Paul Saleh said the company would revert to its restructuring debt. With the €2.9 billion now wiped off its debt pile, around €1.7 billion of debt remains outstanding.

In a statement, Saleh said that Atos expects to complete its restructuring process by the end of 2024 or during the first quarter of 2025. He added that the company secured €800 million in interim financing to fund its operations until the completion of the financial restructuring plan.

Earlier in July, Atos also secured two revolving credit facilities, one of €225 million and another of €350 million.

Meanwhile, Atos remains in discussions with the French government for a further financing line, while some reports suggest that the government is exploring the option to buy the cybersecurity and supercomputer business of Atos in order to “safeguard these strategically important activities” and “keep these activities ” in French hands.

Euro 2024 and Olympics 2024

The news comes at an important moment for Atos, as well as the organizers of major sporting events. Atos was the official IT partner of football contest Euro 2024 and is the official IT partner of the Olympic Games, which kick off in Paris later this month.

In many countries in Europe and worldwide, Atos is a major supplier of IT consultancy and technology services to critical sectors, such as healthcare, defence, aerospace, and energy.