Atos seeks 1.1 billion Euros cash injection amid business challenges

French IT firm Atos put a price tag on a state offer to take over strategic parts of the company on Monday, boosting its shares, but also said it would need almost twice as much cash as estimated earlier this month to stay afloat.

The French government sent a letter of intent to the company over the weekend, offering to acquire assets deemed to have strategic importance including Atos’s Advanced Computing, Mission-Critical Systems and Cyber Products.

The bid, aimed at buying 100% of those units, was based on an indicative enterprise value of between 700 million and 1 billion euros, Atos said on Monday.

Shares in the company, which have lost around 90% of their value over the last two years after a string of profit warnings, a revolving-door of CEOs and the collapse of potential asset sales, were up 19% in early trading in Paris.

Announcing the plan on Sunday, French Finance Minister Bruno Le Maire did not say how the state would organise the units, which employ about 4,000 people and provide services from super-computing to cryptography to France’s military and secret services.

The minister said he was working to convince unspecified industrial companies to invest in the businesses, with defence group Thales in which the state also holds a large stake, and Dassault Aviation seen as potential candidates.

Key partner for Paris Olympics
Atos, which is managing data and cybersecurity for this summer’s Olympic Games, is currently undertaking a refinancing that will result in significant dilution for existing shareholders.

The firm on Monday said it needed 1.1 billion euros in cash to fund its operations over the 2024-2025 period, compared to the 600 million euro estimate given in early April which it indicated last week would not be enough.

The funds would be provided in the form of debt and equity by existing or new investors who have until May 3 to make their proposals, Atos said, with a view to striking a restructuring deal in July.

Triple-C rated Atos said it was targeting a ‘BB’ credit profile by 2026, which would imply a gross debt reduction of 3.2 billion euros, compared with a previous target of 2.4 billion euros. Reuters