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April 9, 2024

Atos seeks over €1bn from creditors to save itself

The restructuring plan presented to investors by Atos calls for a cash infusion, a revolving credit facility and new bank guarantees, with interim funding provided by bondholders and the French government. 

By Greg Noone

Atos has said that it requires over €1bn in funding from creditors to continue functioning for the next two years. In a restructuring plan presented to investors yesterday, the French IT giant specified that it required €600m in cash to fund the business until 2025 and access to an identical sum in the form of a new revolving credit facility and additional bank guarantee lines, as well as deferment of certain debt maturities by five years. It added that interim financing of €450m had been secured from banks, bondholders and the French state. 

The restructuring plan is the latest attempt by Atos to reassure investors about its long-term viability, amid anaemic profits and a crushing debt burden accumulated in recent years. In a market update published this morning, the IT firm said that its new strategy aimed to “protect the social interest of the Company, including its employees, clients, suppliers, shareholders, and other stakeholders and preserve the strategic interests of the French state,” a reference to several cybersecurity and supercomputing assets currently managed by Atos on behalf of the French government. 

The Atos logo on an office building, used to illustrate a story about Credit Agricole withdrawing from a deal to refinance Atos' debts.
Atos has revealed a new restructuring plan to assuage the fears of investors and the French government about its long-term future. (Photo by Tobias Arhelger / Shutterstock)

Atos receiving state support

Atos added that it aims to strike a full refinancing deal with its creditors by July. In the meantime, Atos will receive interim funding of €450m, the majority of which will be provided by bondholders. €50m within that will be provided by the French government via its Fonds de Développement Economique et Social to an Atos subsidiary, Bull SA, responsible for controlling “sovereign sensitive activities” and assets. In return, the state will receive new governance rights over the division, though these stop short of voting rights “at this stage.”

The publication of its restructuring plan comes just a day after the formation of a rescue consortium of leading Atos shareholders named “OneAtos,” the stated aim of which is to recapitalise the firm and restore its status as one of Europe’s leading providers of IT services. It also comes in the wake of successive pronouncements made by the French government about the long-term future of Atos, with prime minister Gabriel Attal stating as recently as last week that the financial stability of the business was a state “priority.” 

Long-term viability of IT giant at stake

Atos runs multiple strategic assets on behalf of the French government throughout its nuclear and defence industries, as well as a “Technology Operations Centre” designed to protect the forthcoming Paris Olympics from cyberattack. The IT giant also oversees contracts across the UK public sector, including for NHS England and the Department for the Environment, Food & Rural Affairs. 

Speculation about Atos’ long-term viability has slowly mounted since 2022 after signs emerged that its plan to pivot toward providing primarily cloud-based IT services was beginning to falter. A combination of its inability to confidently service a multi-billion euro debt burden or sell off key assets only compounded investors’ anxieties about the business and its leadership in subsequent years. 

Read more: Atos future jeopardised as Crédit Agricole sours on debt talks

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