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Atos SE Secures Majority Creditor Support Amid Major Restructuring
A significant majority of creditors of Atos SE have endorsed a lock-up agreement, positioning them to gain control of the ailing French IT services provider. This pivotal development is part of an extensive restructuring plan designed to salvage the company.
Critical Financing and Debt Conversion
Atos has secured €1.68 billion ($1.8 billion) in new financing from existing creditors, aligning with the upper range of prior estimates disclosed on June 30. The restructuring strategy includes converting €2.9 billion of existing loans and bonds into equity. Additionally, these creditors will inject €233 million in fresh equity, either individually or in partnership with a private industrial investor.
Restructuring Timeline and Processes
Creditors who have yet to sign the agreement have until July 22 to do so. Subsequently, Atos plans to seek an expedited safeguard proceeding from a commercial court, a French legal mechanism for restructuring approval. This move will empower the company to enforce the plan even if some creditors dissent.
This agreement marks a crucial turning point in efforts to rescue Atos, a company integral to the French nuclear industry and the Olympic Games. Once a leading tech entity in France, Atos has faced severe financial challenges, including substantial debts and accounting inaccuracies, causing a catastrophic €12 billion decline in market value over seven years.
Efforts to Avoid Bankruptcy
Atos commenced formal restructuring in February to stave off bankruptcy. The plan includes potential sales of its Worldgrid nuclear energy subsidiary and its data and security unit BDS. Proceeds from these sales will prioritize debt repayment, conditioned on the company maintaining a forecasted cash balance of at least €1.1 billion by the end of 2026. If this target isn't met, Atos can retain a portion of the proceeds to bolster its cash reserves.
Company Leadership's Assurance
During negotiations, Atos has engaged in continuous dialogue with its clients. CEO Paul Saleh reassured stakeholders that the company's refinancing is finalized, emphasizing its readiness for upcoming commitments, including the Olympic Games. Saleh affirmed the company's capability to deliver a successful event, consistent with its historical performance.
With these critical elements of the deal in place, Atos aims for a definitive turnaround by addressing its longstanding financial woes and restoring stability.
