Amid financial meltdown, Atos under anxious eyes from investors for its results – 02/27/2024 2:21 pm

The company’s future has been unclear for months, with its restructuring project floundering and its debt levels spooking investors.

Liquidity, debt levels, maturities… IT giant Atos, in the midst of a financial collapse, presented its annual financial results on Thursday under the worried eyes of investors and public authorities, while its planned sale to Czech billionaire Daniel Kratinsky appears. has closed.

“With everyone waiting to hear what Atos will say when these results come out, time is against them,” commented Lionel Melka, managing partner at business consultancy Swan Capital.

Recent announcements by the company, which abandoned a capital increase of 700 million euros in early February and appointed an agent to negotiate with its creditors, have fueled market anxiety.

Atos shares, having depreciated more than 70% since the start of the year, hit a new downward record. At the close on Monday, it was worth just 2.25 euros.

The company’s future has been unclear for several months, with its restructuring project floundering and its debt levels alarming investors, with 3.65 billion euros of loans and bonds due to be repaid or refinanced by the end of 2025.

“What will be examined in the results is the liquidity part, that is, how much money is in the treasury, how much is owed, what are the due dates,” Lionel Melka points out. “Atos is not far from default.”

Around the ad hoc administrator appointed to help the company restructure its debts (Hélène Bourbouloux, who was specifically responsible for the Casino and Orpia files), twenty-two banking institutions are at the negotiating table.

– “Social and Technological Sovereignty” Issues –

But, according to the latest analysis in early February by ratings agency S&P Global, which downgraded Atos in late January, “there is a risk that such an agreement (with creditors) will not succeed. Lack of investor confidence.”

Especially since negotiations with banks are closely linked to the company’s financial health and its takeover plans.

The former IT and outsourcing flagship wants to sell part of Tech Foundation, which brings together historical outsourcing activities, to Czech billionaire Daniel Kratinsky, after announcing its split into two entities.

But discussions around the sale project to become official in the summer of 2023 seem paralysed.

They are “still a work in progress”, Atos said in early February. The company has repeatedly said it has “no certainty” that talks will be successful and has not set a timeframe for talks.

The proposed sale of Big Data and Security (BDS) activities to Airbus, announced in early January, is also still in progress, with both parties beginning the due diligence phase (consultation of accounts, editor’s note).

Financial difficulties and uncertainties about the future of the company, which employs around 110,000 employees worldwide, are also causing concern among public authorities.

Atos, which owns supercomputers used especially in the defense and nuclear sectors, has “social and technological sovereignty issues”, underlines Lionel Melka.

Asked the question in the Senate in mid-February, Marina Ferrari, the new secretary of digital affairs, insisted on the “full and complete mobilization of all members of government” on the “crucial” issue.

A few days earlier, Bruno Le Maire assured Les Echos that the state “will use all the means at its disposal to preserve the strategic activities of Atos”.

A senatorial fact-finding mission has also taken up the matter and has begun closed-door hearings. The current leaders, Jean-Pierre Moustier (president) and Paul Saleh (general director), will be heard in public on April 10.