Atos: the financial restructuring reaches a decisive milestone

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Two days before the opening of the Paris 2024 Olympic Games, of which it is the official technological partner, the IT group Atos announced on Wednesday, July 24, that it had reached a major milestone in its rescue plan.

The Nanterre Commercial Court has opened an accelerated safeguard procedure for a period of two months. This will allow the implementation of the financial restructuring negotiated fiercely over the past four months with the creditors, who have finally provided "sufficiently broad support". "It only concerns financial indebtedness and has no impact on suppliers, employees, the company's governance, or other claims", emphasizes Atos.

This plan provides for a reduction in debt of at least 3.1 billion euros and the implementation of new financing of 1.75 billion euros. Half of the latter will be provided by bank creditors and the other half by bondholders. There will also be a capital increase of 233 million euros open to all shareholders. After these various operations, the creditors will become the new owners of Atos, holding between 74% and 99.9% of its capital, depending on the participation rate of the current shareholders of the group in the fundraising. The group will remain listed on the Paris Stock Exchange.

New debt

The various classes of creditors will be called upon to formally approve this plan by the end of September 2024. The hearing at the Nanterre Commercial Court for the approval of the accelerated safeguard is scheduled for October 15, 2024, and the capital increases and issuance of new financing will be staggered between November 2024 and January 2025, as specified by Atos. In the meantime, an interim financing of 800 million euros has been put in place to provide 'the necessary liquidity to finance the activity until the closure of the financial restructuring plan,' notably to ensure the smooth running of the Olympic Games.

These positive steps do not dispel all the uncertainties about Atos's future, whose business has suffered greatly in recent months due to financial difficulties. The new financing provided by bank and bond creditors will come at very high interest rates, reaching 13% for certain types of credit. As a result, a large portion of the group's future profits will be used to repay this new debt. 'Atos's management in the coming months will focus on maximizing value for creditor shareholders rather than a long-term vision, which could be more synonymous with dismantling than building,' noted Matthieu Bailly, founder of the asset management company Octo AM, in a post published on his site in early July.

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Summary
Atos, the official technological partner of the Paris 2024 Olympics, has reached a major milestone in its financial restructuring plan by initiating an accelerated safeguard procedure. This plan aims to reduce debt by at least 3.1 billion euros and secure new financing of 1.75 billion euros, with creditors becoming the new owners of Atos. Despite these positive steps, concerns remain about the company's future as the new high-interest financing may impact future profits, leading to a focus on short-term value for creditor shareholders.