France’s Atos opens debt restructuring talks after posting record losses

By Augustin Turpin and Mathieu Rosemain

(Reuters) -Atos, the crisis-hit French IT consulting firm whose shares plummeted over the last two years, said it was aiming to restructure its heavy pile of debt by July, paving the way for a potential capital increase to shore up its balance sheet.

The Paris-based group, built up and formerly led by EU Industry chief Thierry Breton, will seek to find common ground with creditors over the whole of its debt, 4.65 billion euros at end of 2023, it said.

Atos says it still has enough liquidity to run the business for now but its debt burden has become unsustainable, with 3.65 billion euros worth of debt due by end of 2025, as recent attempts to inject fresh cash via selling chunks of the group failed.

Airbus’ walk-out from talks to acquire the firm’s most valuable asset, cybersecurity BDS, came on top of the recent collapse of negotiations with Czech billionaire Daniel Kretinsky over the sale of Atos’ loss-making legacy operations.

The talks with bondholders and banks will take the form of a so-called amicable conciliation procedure and will be court-supervised, Atos said, adding that it would update markets in coming weeks on them.

The group said an agreement over a restructuring of its debt could lead to new cash injection in the form of new equity, thus resulting in a dilution of the existing shareholders.

Atos, which owns assets considered strategic by the French government and is struggling to turn around its loss-making business, posted a record net loss of 3.44 billion euros ($3.73 billion) for the year ended Dec. 31 after a loss of 1.01 billion euros in 2022.

More than two-thirds of the losses stem from an impairment charge tied to both Atos’ divisions, Tech Foundations and Eviden.

The group said in February it had rescheduled its 2023 earnings release to complete the audit of the non-cash goodwill impairment charge.

($1 = 0.9223 euros)

(Reporting by Augustin Turpin and Mathieu Rosemain; Editing by Jamie Freed, Tassilo Hummel and Shri Navaratnam)