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February 5, 2024

New Atos debt talks imminent as tech firm seeks refinancing agreement with lenders

Atos, the troubled French software giant, is seeking more generous terms from its banks for large debts it racked up after the pandemic.

By Greg Noone

Atos is in talks with its lenders to refinance its debt, the French software company has confirmed. In a market update released this morning, the firm also said that it had appointed an independent third party to supervise its discussions with banks to obtain a new agreement that would suit the company’s best interests (a process known as a ‘mandat ad hoc’). Meanwhile, current market conditions mean that a planned rights issue of €720m underwritten by BNP Paribas and JPMorgan has now been called off. 

“The mandat ad hoc is an amicable procedure allowing negotiations to be conducted within a confidential framework,” said Atos. “The mandat ad hoc would only concern the financial debt of the Company and would have no impact on the employees, customers and suppliers of the group.”

A photo of the Atos logo on a brick wall, used to illustrate a story about an Atos debt refinancing attempt.
Atos debt negotiations are imminent as the French IT service provider finds itself up against the wall with its credit commitments and inability to sell key assets. (Photo by Manuel Esteban / Shutterstock)

Atos debt refinancing latest pitfall for troubled tech firm

Atos, which is attempting to transition its business away from selling on-premise IT products to cloud-based services, is currently saddled with a €1.5bn loan it took out in 2022 and €750m worth of corporate bonds. Both credit lines mature in 2025, which last year prompted the IT services provider to embark on a strategy of hiving off some of its more valuable assets. 

While Atos has been eager to sell these assets, however, negotiations to complete these transactions have either proven abortive or have been strung out indefinitely. In early 2023, Airbus made and then withdrew a multi-billion euro offer to acquire a major stake in Atos’ cybersecurity business, Eviden, before launching into new talks to snap up another Atos-branded business, BDS. Talks to sell its Tech Foundations infrastructure arm to EPEI for €2bn, meanwhile, have been ongoing since August. 

Atos instability questions

The firm added that it was now in the due diligence phase of its talks with Airbus over the sale of BDS, while negotiations with EPEI were continuing. This morning’s market update from Atos, however, did little to raise hopes that they would result in a sale, with the company stating that there was “no certainty that these negotiations will result in an agreement.”

One person who will be very interested in the successful resolution of these talks and the Atos debt renegotiations is the firm’s chief executive, Paul Saleh. The fourth CEO to run Atos in two years, Saleh’s focus is to focus on “refinancing the Group’s financial debts.” A former veteran of the Walt Disney Company and the Sprint Nextel Corporation, Saleh succeeded Yves Bernaert, who was in the chief executive’s chair for less than three months before he was unceremoniously booted from the position in mid-January.

Read more: Atos chair departs as shareholders hit out at planned sale to billionaire

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