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Atos, a prominent player in digital transformation, has unveiled strategic adjustments in response to financial constraints, marking a pivotal moment in its ongoing business transformation.

Financial Strategy in the Spotlight

Amidst financial constraints, Atos is recalibrating its strategy to ensure the repayment and refinancing of its financial debts while preserving an appealing business mix. The company faces the challenge of addressing specific debt maturities, including term loans, bonds, and revolving credit facilities. At the forefront of these efforts is a €1.5 billion term loan A maturing in January 2025, subject to two extensions of six months each. The first extension is slated to take effect on January 29, 2024. Additionally, bonds maturing in 2024, 2025, 2028, and 2029, along with a revolving credit facility maturing in November 2025, present a complex financial landscape for Atos.

The company aims to cover these financial debt maturities by considering available cash at the end of 2023. However, specific working capital actions, while impactful, are not permanent and cannot be fully considered in addressing the reduction of debt.

Asset Disposal Program: A Key Element

Recognizing the uncertainty surrounding negotiations, Atos is rolling out an additional asset disposal program. At the forefront is the potential sale of the BDS (Big Data & Security) business. The company is engaging in a due diligence phase with Airbus, exploring an enterprise value ranging from €1.5 to €1.8 billion for the entire BDS perimeter. Discussions are at a preliminary stage, with updates expected in due course.

In the event that negotiations with EPEI on the sale of Tech Foundations do not reach a conclusive agreement, Atos is actively considering the disposal of other assets. The sale of BDS is highlighted as a key factor in maintaining the strategic interest of remaining activities.

Risks and Ongoing Negotiations

As Atos maneuvers through these strategic adjustments, the company is cognizant of potential risks. Discussions with banks are underway to maintain financing and secure refinancings, with the objective of avoiding a potential downgrade of the Group’s credit rating. In the face of uncertainties tied to ongoing negotiations, Atos is considering legal protection mechanisms to frame discussions with creditors. The first quarter of 2024 will be crucial in assessing the sufficiency of available options to cover financing maturities and long-term cash requirements.

Governance Changes to Bolster Expertise

Simultaneously, Atos is strengthening its Board of Directors with strategic appointments. Françoise Mercadal-Delasalles and Jean-Jacques Morin join the Board, bringing expertise in finance and major transformation projects. These changes aim to fortify the company’s governance structure and enhance its capabilities in navigating the evolving landscape. As part of these governance changes, Valérie Bernis, Aminata Niane, Vernon Sankey, and René Proglio have decided to resign from the Board of Directors. Françoise Mercadal-Delasalles and Jean-Jacques Morin’s appointments are pivotal in maintaining effective governance amid the ongoing transformation.

Outlook and Investor Engagement

Atos plans to assess the effectiveness of these measures in the first quarter of 2024, determining their adequacy to cover financing maturities and long-term cash requirements. Stakeholders are invited to join an international conference call on January 3, 2024, at 08:00 am (CET – Paris) to delve into these developments and gain insights into Atos’ future trajectory.

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