Atos shares slide as it agrees to dilutive restructure

Shares in French IT giant Atos were sliding on Tuesday morning, after it announced that its board had decided to proceed with a restructuring plan that would seriously dilute the equity of existing shareholders.

It said it had agreed to the financial restructuring proposal submitted by the Onepoint consortium, including Onepoint, Butler Industries, Econocom, and a group of the company's financial creditors.

The company said its decision followed an extensive review under the guidance of a conciliator and aligned with its corporate interests, benefiting employees, clients, and other stakeholders.

It said the proposal from the Onepoint consortium, preferred over an alternative from the EPEI consortium, met the financial parameters it outlined in April, ensuring adequate financial liquidity and a stronger capital structure.

The board said the Onepoint consortium’s proposal had garnered substantial support from Atos' financial creditors, increasing its confidence in reaching a definitive financial restructuring agreement.

It said the plan included the conversion of €2.9bn of existing debt into equity, the injection of €1.5bn in new money debt, including €300m in bank guarantees, and an additional €250m in new equity.

The new equity would see €175m coming from the Onepoint consortium, representing 21% of the fully-diluted equity, and €75m from creditors, representing 9% of the fully-diluted equity.

“Today is an important milestone in our financial restructuring process,” said Jean-Pierre Mustier, chairman of the Atos board.

“A solution has emerged, which aligns with the interest of the company’s stakeholders, particularly our employees and clients.

“This solution gives us a clear path to reach a final financial restructuring agreement by July.”

Atos said that alongside the conciliator, it would work closely with the Onepoint consortium to finalise the necessary documentation.

The goal was to reach a definitive financial restructuring agreement by July, which would be implemented through a dedicated accelerated procedure.

It said the restructuring plan, while ensuring the company's financial future, would result in a significant dilution of existing shareholders, who will hold less than 0.1% of the company's share capital post-restructuring.

“The proposal submitted by the Onepoint consortium is generally consistent with the key financial parameters outlined by the company in April,” commented chief executive officer Paul Saleh.

“In particular, it will adequately fund the business and allow Atos to extend its leadership position in the market and continue to deliver outstanding services and solutions to its clients.”

At 1111 CEST (1011 BST), shares in Atos SE were down 10.92% at €1.02.

Reporting by Josh White for Sharecast.com.