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July 5, 2024

Atos secures short-term funding, with prospect of final restructuring by August

The agreement with bondholders may cap years of chaos at Atos, which oversees major IT contracts on both sides of the English Channel.

By Greg Noone

The agreement with bondholders may cap years of chaos at Atos, which oversees major IT contracts on both sides of the English Channel.

Atos has announced it has secured interim financing ahead of an anticipated restructuring of the business later this month. In a statement published by the troubled French IT giant this morning, Atos confirmed that had secured tranches of €225m and €350m from lenders in a revolving credit facility. The news will likely be welcomed by the firm’s clients on both sides of the English Channel, with some openly speculating that its negotiations with investors over a bailout may fail and lead to the company’s collapse – and with it several major public sector IT projects.

For its part, Atos remained optimistic that this would not happen as it outlined the next steps of its restructuring initiative. “As indicated in its press release of June 30, 2024, the Company expects the signing of the lock-up agreement allowing all financial creditors to support the proposed restructuring plan during the week starting July 8,” it said. “The definitive financial restructuring agreement with the financial creditors would then be implemented through a dedicated accelerated procedure from the week starting July 22.”

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 attained a short-term funding agreement with a group of bondholders. (Photo by Tobias Arhelger / Shutterstock)

Atos courts bondholders, spurns Layani

The provision of the revolving credit facility follows Atos agreeing to a partial financial restructuring plan with a group of bondholders named ‘Steerco’ late last month. In that agreement, the IT giant said it would turn €2.8bn of its prodigious debt burden into equity, bringing the overall total of monies owed to €2.9bn. Atos said that the deal was a “significant milestone towards reaching a final restructuring agreement by July.”

The prospects of this happening remain unclear. After soliciting proposals from several investment consortiums on how to restructure its debt and bring it back into solvency, Atos rejected proposals from both Bain Capital and billionaire Daniel Kretinsky’s EPEI group. That effectively just left a proposal from Atos investor David Layani in the running. However, on 26 June Layani’s company, OnePoint, abruptly withdrew from negotiations with the embattled IT firm, leaving Steerco as the only viable option to bail Atos out of its predicament. 

French and UK concerns

If Atos succeeds in its goal of agreeing on a permanent restructuring plan by the end of this month it will conclude a dire few years for the company, which has seen declining profits, rising debt and a parade of chief executives hired and fired in quick succession. 

It will also likely allay the doubts of both the UK and the French governments about Atos’ capacity to continue overseeing sizeable IT projects on both sides of the English Channel. Last month, auditors Grant Thornton and PwC separately argued that the inability of the company to obtain an agreement on its financial future endangered the operations of its British arm and, to that extent, the 43 IT contracts overseen by the firm across the Ministry of Defence, the Department of Work and Pensions, the NHS and other public bodies. 

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The French government, meanwhile, has moved to nationalise several Atos-run assets. On 14 June, the Macron administration offered to buy Atos’ big data and security unit for over €700m. In so doing, the French state aimed to secure key military and cybersecurity assets overseen by the IT firm. 

Read more: The fall of Atos: What went wrong? And what happens next?

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