French IT group Atos is planning a major financial restructuring to reduce its debt burden.

The French IT company Atos wants to convert almost 50 percent of its debt into shares. This is part of a plan to repay €1.2 billion in debt this year. This first step is essential to the company’s refinancing plan. According to Belga, the announcement came before the opening of the Paris trade fair.

Atos needs 600 million euros in cash to finance its activities between 2024 and 2025. The French IT group is seeking a further 600 million euros for credit lines and loan guarantees. The aim is to reduce debt by 2.4 billion euros by the end of 2026 and to extend the term of the remaining debt by five years.

In order to create the necessary financial flexibility, Atos has concluded an agreement in principle with various banks and the French state for interim financing of 450 million euros. This should allow the company to reach a final refinancing agreement by July. In return for a €50 million loan from the French government, the company will receive a preferential stake in Bull SA, a subsidiary of Atos.

A lot of guilt

Atos’ financial situation is precarious. The IT group has a mountain of debt of almost 5 billion euros and last year recorded a net loss of 3.4 billion euros in 2023. The company’s market value has fallen by 80 percent within a year. At Atos, which plays an important role in organizing the Paris Olympics, four CEOs have died in two years.

Atos must repay more than 3.6 billion euros in debt by the end of 2025. The situation was exacerbated by the failure to reach an agreement with Airbus to sell Atos’ cybersecurity division. Late last year, France threatened to nationalize Atos when several buyers came forward. Today the situation is precarious and no one except Atos itself, with its 112,000 employees, seems to hold the key.