Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Czech billionaire Daniel Křetínský has dropped plans to buy a unit of Atos, imperilling last-ditch efforts by the French IT company to avoid insolvency proceedings.
Atos said on Wednesday that talks with EPEI, Křetínský’s investment vehicle, had ended with no agreement over the purchase of its lossmaking division, Tech Foundations.
The two parties had agreed a deal in August under Atos’s previous chair, but in November his successor Jean-Pierre Mustier, the former UniCredit chief executive, sought to negotiate a higher price.
“The parties have not met a mutually satisfactory agreement,” Atos said in a statement. Representatives for Křetínský declined to comment.
Atos has appointed a mediator to help extend and refinance borrowings after various turnaround attempts. Credit rating agencies have downgraded the group’s debt to junk status and warned of its poor liquidity amid high cash burn.
Atos shares fell as much as 5 per cent in early trading before recovering for a market value to €258.76mn. Shares in the company have fallen by more than 90 per cent in the past three years, during which the company has cycled through multiple chief executives.
Atos faces repayments on €3.65bn in debt before the end of 2025 — which it has been trying to push out to 2028 in talks with its bank lenders — and is burning cash rapidly. The company reported a negative free cash flow of €1bn last year — over five times higher than in 2022 — while net debt totalled €2.23bn as it delayed reporting its full annual results to March 20.
The talks with Křetínský had been at a standstill for weeks, according to several people with knowledge of the situation, with neither side willing to be the first to walk away until now.
Negotiations with lenders are running into trouble before their official start. Crédit Agricole, one of its biggest creditors, has been backing away from refinancing the company, the Financial Times has reported.
As concerns over the debt burden at Atos have mounted and the Křetínský deal soured, Mustier has explored other options by kicking off talks with Airbus to sell the company’s prized big data and cyber security unit BDS for as much as €1.8bn. However, a deal could take time to finalise.
Other debt holders have been growing increasingly concerned that they could be hurt in the process, according to people with knowledge of the situation, while distressed funds, including Attestor, have been circling the situation.
Read the full article here