Atos secures €1.7bn for financial restructuring

The services giant seems to have also reached a lock-up agreement with a group of banks and bondholders

French IT reseller and services provider Atos has successfully secured €1.67 billion in new financing and reached a lock-up agreement with a group of banks and bondholders, marking another key step in implementing its protracted restructuring.

Jean-Pierre Mustier, chairman of Atos' board of directors, called the lock-up Agreement "a key milestone in our financial restructuring process," emphasising its importance for the sustainability of Atos' operations and the interests of employees and clients.

The new secured financing of €1.67 billion is evenly split between a group of banks and bondholders, each committing €837.5 million.

The banks' portion includes a term loan, revolving credit facility, and bank guarantees, while bondholders will provide their share through a new bond issue.

Atos CEO Paul Saleh stated that this agreement puts the company "a step closer to filing the plan with the tribunal of commerce by end of July as originally targeted".

He added that the plan would provide Atos with "an improved financial position and a stronger credit profile."

The restructuring plan includes several capital increases, including a €233 million rights issue for existing shareholders and the equitisation of €2.8 billion of Atos' financial debt.

The company warns that these measures will result in significant dilution for existing shareholders, who could see their stake reduced to less than 0.1 per cent of the share capital if they do not participate in the proposed capital increases.

As part of the restructuring, Atos has also secured €800m in interim financing to fund its operations until the completion of the financial restructuring plan.

The company said it is aiming to open accelerated safeguard proceedings during the week of 22nd July, 2024, to implement and obtain court approval for the financial restructuring plan.

Atos expects to complete the restructuring operations by the end of 2024 or during the first quarter of 2025.

A never-ending saga

The French tech giant Atos' restructuring has been the subject of ample news coverage over the past year, as various parts of the business have sought to be bought up by private entities and the French government.

Most recently, because two board members, David Layani and Helen Lee-Bouygues, resigned just as Onepoint shared its intention to withdraw from Atos' share capital.

This withdrawal was part of a larger development where the consortium consisting of Onepoint, Butler Industries and Econocom pulled out of restructuring discussions with Atos.

This was seen as a significant setback, as Atos had accepted the consortium's proposal on 12th June, which included a plan to convert €2.9 billion of existing debt into equity.

Now the French company seems to have locked in a restructuring deal that should help navigate its long-standing financial troubles.

This article was first published in CRN UK