Business

Atos Debt Negotiations Drag On, Rights Issue Shelved Amid Market Turmoil

Marlin Gred
Marlin Gred

A possible merger with rival Stellantis was the subject of media speculation on Monday, which resulted in a gain of more than 4% for Renault shares. The Italian newspaper Il Messaggero said on Sunday that France is considering a merger between the two businesses to increase its influence in the automotive industry and counter competition from China and Germany, citing unnamed financial sources.

According to people familiar with the situation who spoke to Reuters, the tech company was under pressure from bond investors to reduce its debt load before a 1.5 billion euro term loan and 750 million euros in bonds matured in January 2025. It was anticipated that Atos would sell the struggling legacy company TFCo and its related assets to a newly formed organization supported by the EPEI of Czech billionaire Daniel Kretinsky to increase its creditworthiness and leverage.

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But a deal has proven hard to come by, as EPEI is only willing to take on a portion of the corporate debt of the company and is unwilling to invest as much as Atos had hoped. After announcing in July that it would divest 400 million euros worth of its non-performing businesses, Atos said it would now look to raise capital in other ways.

Atos intends to strengthen the balance sheet of its intended new spinoff group, Eviden, while lowering its debt and leverage with the proceeds of any sales and capital increases. It further stated that it would think about asking its bank syndicate to grant the required loan waivers.

A senior source close to the business claimed that even though S&P Global Ratings had warned on Monday that it would downgrade the company to “BB-” if financing could not be secured quickly, Atos was still in talks with its banks and could still close a deal by early next year. Without providing more information, the source stated, “The banks have been notified of our intention to move quickly on a funding solution for refinancing our financial debt.”

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