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February 8, 2024

Atos future jeopardised as Crédit Agricole sours on debt talks

Any failure to renegotiate the billions in debt Atos owes to its creditors could mean the collapse of the leading French IT services provider.

By Greg Noone

Negotiations to refinance Atos’ debts are in jeopardy after one of its main lenders, Crédit Agricole, withdrew from talks. The French bank said that it was reluctant to revisit the terms of an original deal that saw Atos borrow €1.5bn from creditors to help fund restructuring efforts at the business. The news follows a commitment from France’s finance minister, Bruno le Maire, to readers of Les Echos that the government would not let the IT services provider be sold to a foreign buyer. 

It appears that bankers at Crédit Agricole had become increasingly disillusioned with Atos for some time. The bank has “been wanting to get out for some time now,” sources told the Financial Times. “It’s been at least three weeks that they’ve really wanted to get out.”

The Atos logo on an office building, used to illustrate a story about Credit Agricole withdrawing from a deal to refinance Atos' debts.
Storm clouds may be brewing overhead for Atos as the French IT services company saw Credit Agricole withdraw from talks to refinance its extensive debts. The former sees refinancing talks as a major factor in allowing it to return to profitability and complete its intended pivot toward selling cloud-based services to its customer base. (Photo by Tobias Arhelger / Shutterstock)

Atos refinancing failure could mean the death knell for the business

Atos refinancing talks began in earnest three days ago after market conditions forced it to cancel a €720m rights issue underwritten by JPMorgan and BNP Paribas. The IT services provider also announced that it would be appointing an independent third party, in a process known as a “mandat at hoc,” to supervise talks with its main primary lenders and avoid defaulting on billions in loans and bonds that mature in 2025. 

The withdrawal of Crédit Agricole from Atos’ refinancing talks is the latest setback for the troubled IT giant, which has sought to use the money it originally borrowed in 2022 to fund an ambitious pivot away from selling on-premise IT products to providing cloud-based services. Part of that plan also consisted of selling key assets, though this strategy has only been partially successful. Last year saw Airbus make and then withdraw an offer to buy Atos’ cybersecurity arm, Eviden, before entering into new negotiations to buy another Atos unit, BDS. Meanwhile, attempts by Atos to sell its Tech Foundations business to EPEI for €2bn have dragged on until August, with talks now appearing to be at an impasse. 

Carousel of chief executives

Atos’ inability to turn a profit has also attracted the concern of the French government. On Monday, the country’s finance minister, Bruno le Maire, told Les Echos that the state would be prepared to support the financially support the company, which employs 10,000 people in France alone and oversees several important IT projects across its defence industry. The state would, said le Maire, use “all means at its disposal” to support the business, seemingly escalating a commitment he made in November which merely promised to keep the business in French hands.

News of Crédit Agricole’s withdrawal from Atos’ refinancing talks will likely alarm the latter’s chief executive, Paul Saleh, appointed last month for the express purpose of renegotiating the IT service providers’ prodigious debts.  If Saleh fails to convince Atos’ creditors that its debt is worth refinancing, then it is likely that the firm will be forced into a French form of bankruptcy, wherein outstanding loans are exchanged for equity in the business. Saleh’s own job would also likely be in danger. The firm’s fourth chief executive in two years, the former Atos CFO replaced Yves Bernaert, who was in the top position for less than three months before being ousted.

Read more: Atos chair resigns after criticism of sale of business to billionaire

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