Atos Faces Share Plummet Following Strategic Shift: A Closer Look
Atos, a prominent French technology company, encountered a significant 27% drop in its shares on Monday. This downturn transpired as the company unexpectedly abandoned plans for a rights issue, citing the dynamic shifts in the “market environment.” Consequently, initiated discussions with its banking partners to navigate the intricacies of debt refinancing.
Amidst a carousel of leadership changes, with its fourth CEO in less than two years, and grappling with a series of profit warnings, Atos is now enlisting the assistance of an independent third party to facilitate dialogues with banks. The previously standby underwriting commitment of 720 million euros ($776 million) from BNP Paribas and JPMorgan for a rights issue is now null and void, according to Atos.
Commitment to Transparency Amid Market Volatility
Atos remains steadfast in its commitment to keeping the market well-informed about ongoing discussions with banks, the blueprint for refinancing, potential disposals, and any structural changes that might lead to a dilution of existing shareholder stakes.
As of 0857 GMT shares had plummeted by 27%, marking a cumulative descent of over 50% for the year. In November, the company hinted at tapping into capital markets and shedding additional assets to address its capital raising plan, including a 1.5 billion euro term loan maturing in January 2025 and 750 million euros in bonds maturing in May 2025.
The current negotiations involve the potential sale of Tech Foundations, Atos’s beleaguered IT consulting arm, to Czech businessman Daniel Kretinsky’s EPEI group. However, Atos underscores the uncertainty surrounding these negotiations, emphasizing that there is no guarantee they will culminate in an agreement.
In January, the company had forewarned that its free cash flow for the latter half of 2023 would slightly miss the mark set in its initial target. This scenario underscores persistent challenges and the inherent uncertainties shaping its financial landscape. The company finds itself at a critical juncture, navigating both internal shifts and external market volatility.
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