France's Atos expands debt restructuring talks after record losses

By Mathieu Rosemain and Augustin Turpin

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

The technology giant, which manages data and cybersecurity for France's nuclear industry and the upcoming Olympic Games, will seek to find common ground with creditors over the whole of its debt, which stood at 4.65 billion euros ($5.04 billion) at the 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 cash from asset sales failed.

The company had already opened talks with its banks to refinance its financial debt. The talks, led by a court-appointed mediator, now also include bondholders.

Airbus' walk-out from talks to acquire the group's most valuable asset, the cybersecurity unit BDS, followed the collapse of negotiations with Czech billionaire Daniel Kretinsky over the sale of its loss-making legacy operations.

The failure of talks with Airbus last week caught the French tech giant off-guard, sources close to the talks said, dashing hopes that the deal would ease its financial uncertainty.

David Layani, Atos' top investor with a 11% stake and who sits on the company's board, said in an interview with Le Figaro on Sunday that he could anchor a possible restructuring plan for the company.

Atos said on Monday that Layani had not yet presented any restructuring plan to the company.

Sources close to the matter said the businessman, who owns the smaller IT consulting firm One point, could inject cash into the company.

Kretinsky may also assess investing new equity into Atos again, a separate source close to the matter said.

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.

The group said an agreement over a restructuring of its debt could lead to a cash injection in the form of new equity, 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, reported a record net loss of 3.44 billion euros for the year ended Dec. 31.

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

A former member of France's blue-chip index CAC 40, Atos's stock price was down by 7% at 1015 GMT, valuing the company at less than 200 million euros.

Atos' equity was worth more than 8 billion euros at the end the of 2020.

($1 = 0.9219 euros)

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