Atos plans to refinance debt after posting record annual loss

Atos will seek talks with its creditors over restructuring its debts after posting a record annual loss.

The French IT infrastructure and consulting company reported a deficit of €3.44 billion ($3.73bn) for the year to the end of December 2023, up from €1.01 billion ($1.08bn) in 2022.

It also has debts of €4.65 billion ($5.05bn), €3.65 billion ($3.9bn) of which is due to be paid back by the end of 2025. It is seeking talks with banks over refinancing these loans.

Speaking after the results were released, Atos CEO Paul Saleh said: “We are in discussions with our financial creditors with a view to reaching a refinancing plan by July.”

Restructuring the debt could lead to a cash injection via new equity being issued, Atos said, but this would dilute the company’s plummeting share price even further. Its stock value hit a new low of €1.59 ($1.73) after the results were released.

Earlier this week, David Layani, CEO of digital consultancy firm OnePoint, which holds 11 percent of Atos shares, said his company would be prepared to step in and provide additional finance to keep Atos afloat. The Atos board said it had yet to consider or approve such a plan.

Revenue at Atos flatlined last year, with growth of just 0.4 percent, to €10.6 billion ($11.5bn). Much of the loss stemmed from an impairment charge tied to both the Atos business divisions, Eviden and Tech Foundations, the company said.

Atos is one of France's most important technology companies, and holds a string of public and private sector IT contracts across Europe. But it has been in the doldrums for several years, and created Eviden and Tech Foundations in 2021 as part of a turn-around plan designed to return the business to growth.

Eviden manages the company’s cloud, cybersecurity, data and supercomputing efforts, which are seen as potential growth areas for the business, while Tech Foundations oversees its less-profitable legacy managed infrastructure contracts. Atos operates five of its own data centers according to Data Center Platform, three in France and one each in Austria and Germany.

Though the initial idea was to run Eviden and Tech Foundations as separate, publicly-listed, businesses under the Atos umbrella, the debt problems facing the company have led to both units being put up for sale. However, a planned acquisition of Tech Foundations by private equity fund EPEI fell through last year, while earlier this month it was confirmed that talks between Atos and Airbus, which would have seen the latter purchase part of Eviden for €1.8 billion ($2bn) had been called off too.

Check out the next issue of DCD Magazine for an in-depth look at the Atos situation and what the future might hold for one of France’s most important technology companies.