French IT giant Atos will choose to adopt one of two restructuring plans written to save the ailing business from collapse by 5 June. Volunteered by consortiums led by Daniel Kretinsky and David Layani respectively, the plans would both substantially reduce the firm’s debt burden and the stake of most of its other shareholders. Atos is currently fighting to secure its future after a series of reverses that have seen its share price plummet, a high turnover in its senior leadership and the appointment of an independent conciliator figure to arbitrate new refinancing pitches.
“Both proposals are generally consistent with the financial parameters set by the Company, including debt reduction and near-term and mid-term financing needs,” said Atos in a market update this morning. “Atos’ Board of Directors has authorized management to work with the Company’s financial creditors, under the aegis of the Conciliator, to ensure the maximum support is likely to be secured for one of those proposals by June 5 with the aim to reach a final financial restructuring agreement by July 2024.”
Competing refinancing proposals for Atos
The pitches from the consortiums led by Layani and Kretinsky differ substantially. The first of the two plans would provide €350m in immediate funding, €500m over the longer term and erasure of €3.2bn of Atos’ debt through converting corporate assets into equity, among other measures. In return, Layani’s consortium would receive a 35% stake in the business.
Kretinsky’s consortium, meanwhile, proposes a higher short-term cash infusion of €600m for the firm, €1.3bn in long-term financing and a reduction of its debt by €4bn. In exchange, however, Kretinsky’s investment vehicle EPEI and its UK partner Attestor would receive almost total control of Atos.
French state may invest more in ailing IT giant
Atos added that it will “continue to inform the market on the progress of its discussions” with a view to concluding them by July. In the meantime, the firm will subsist on €450m of interim financing, including €300m factoring program with a collection of banks, a $100m revolving credit facility provided by bondholders, and €50m loan from the French government to its Bull SAS subsidiary to protect any sensitive national IT projects currently overseen by Atos. The IT giant added that discussions with the Macron administration to purchase several units of its BDS division with “an indicative enterprise value [of] €700 million and €1 billion are progressing well.”
