In key news on French stocks, Atos SE (FR:ATO) has inched closer to a final restructuring agreement after agreeing to financial terms with a group of banks and bondholders. The company sees this as a significant milestone towards its final deal, expected in July. It also stated that the proposed financial restructuring plan will lead to a significant dilution for Atos’ existing shareholders.
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Atos is an IT company that provides consulting, technology services, cloud and infrastructure services, etc. worldwide.
Atos Share Price Struggle
Year-to-date, ATO stock has lost 86% of its value amid growing financial pressures, including a huge pile of debt. ATOS reported net debt of €3.9 billion in its first quarter for 2024, up from €2.2 billion at the end of 2023.
Since then, the company has been part of multiple discussions to come out of this financial crisis.
Earlier this month, ATOS announced that it had selected the rescue deal from its key shareholder, David Layani’s IT firm, Onepoint, which owns around 11% of Atos’ share capital. However, the deal collapsed last week. Onepoint is now exploring options to exit its investment in Atos. Consequently, Atos shares plunged 15% on Friday.
Key Details of Atos’ Restructuring Plan
According to Atos’ update, bondholders and lenders have agreed to convert €2.8 billion of loans and bonds into equity, resulting in a total converted debt of €2.9 billion. They will also provide between €1.5 billion and €1.68 billion in new secured financings.
Additionally, the plan includes €233 million in new equity, with preferential subscription rights. The restructuring will significantly reduce the net indebtedness of the company by around €3.1 billion.
The agreement also includes the potential for a new anchor investor to participate in the capital increases.
Is ATOS a Good Buy Right Now?
According to TipRanks, ATO stock has received a Moderate Sell rating based on three Sells and one Hold recommendation. The Atos share price target is €1.21, which is 23.07% above the current trading levels.
