Tech Foundations Shake-Up
In a press release on Tuesday, Atos outlined its strategic measures aimed at reinforcing its financial stability. The company is actively considering asset sales and engaging in discussions with Czech billionaire Daniel Kretinsky to revise aspects of the proposed 2 billion euro ($2.11 billion) Tech Foundations deal. These strategic moves are in response to a capital raising plan and the impending challenge of debt maturing in 2025.
Capital Raising and Debt Maturation
Atos is actively exploring various avenues to boost its capital, which includes potential asset sales and accessing capital markets. The company is facing a significant hurdle with a 1.5 billion euro term loan maturing in January 2025, coupled with 750 million euros in bonds set to mature in May 2025.
Tech Foundations Deal
In advanced negotiations with Daniel Kretinsky's EP Equity Investment (EPEI) vehicle, Atos aims to modify aspects of the proposed Tech Foundations deal, valued at 2 billion euros. As part of this transaction, Kretinsky is set to acquire a 7.5% stake in Atos' cybersecurity unit, Eviden.
Market Reaction and Analyst Insights
Atos' strategic shift has impacted its market value, experiencing a decline of over 6%. Analysts, including Helene Coumes from AlphaValue, attribute this downturn to uncertainties surrounding the Tech Foundations deal, financial complexities, and concerns about the impact on minority shareholders. Diverse industry perspectives emphasize the need for clarity and favorable terms for all stakeholders.
Onepoint's CEO David Layani, holding almost 10% of Atos' capital and voting rights, has called for a review of the deal with Kretinsky, expressing reservations. This adds complexity to the situation.
Credit Rating Downgrade
S&P Global Ratings downgraded Atos' rating to 'BB-' from 'BB' on Monday, citing heightened liquidity risk. The rating remains on credit watch negative, with the potential for a multiple-notch downgrade if Atos fails to implement a refinancing plan for the 2025 debt early next year.
In response to inquiries, Atos' spokesperson indicated that, as of now, there are no comments beyond the press release issued earlier in the day. Anticipated communications from the company are expected to provide additional details or address concerns.