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French IT firm Atos shares drop 14% amid refinancing plan announcement

Written by Tue 9 Apr 2024

Image Credit: Reuters

French IT company, Atos, witnessed its shares fall 14% on Tuesday triggered by the consulting firm’s announcement of a refinancing plan, involving the raising of £1 billion ($1.3 billion). Existing shareholders are concerned about significant dilution as a result of this strategy.

The French IT firm manages cybersecurity for France’s forthcoming Olympic Games and nuclear industry. In March, Atos aimed to reconcile with creditors regarding its £3.9 billion ($5 billion) debt from the previous year. 

Atos aims to secure £514 million ($652 million) for its operations in 2024 and 2025, inviting proposals from investors for debt and equity financing by 26 April. It also intends to raise £257 million ($326 million) in a new revolving credit line and £257 million ($326 million) in new bank guarantees. 

CEO at Atos, Paul Saleh, said the company has secured interim financing of £342 million ($435 million) from creditors to support its operation until a long-term plan is finalised. This plan should facilitate a refinancing deal by June which Saleh said will result in significant dilution for shareholders.

The planned agreement extends debt maturities, including £3.12 billion ($3.9 billion) due by the end of 2025, by five years. 

The French Government said it will provide Atos with a further loan of £42 million ($54 million). As part of this financial support, the Government will have further influence over the strategic decisions and activities of the company like its spy-to-AI assets considered strategically important to the Government.

Butler Industries Joins Consortium to Assist Atos

Paris-based industrial investor, Butler Industries, announced it has joined a consortium to assist Atos. The action is being undertaken leading shareholder of Atos, Onepoint, which holds an 11.4% hold of the company. 

The consortium intends to ‘make Atos the European platform for digital, cybersecurity and artificial intelligence (AI), and the leading European cloud operator’.

Through the consortium, the plan aims to protect the company’s assets, restructure its debts, and restore its growth trajectory.

Atos projected revenue of £8.4 billion ($10.7 billion) and an operating margin of 4.3% for this year. The company said it aims to increase revenue to £9.7 billion ($12.4 billion) by 2027.

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Written by Tue 9 Apr 2024

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