Atos shares tank after IT group cancels rights issue and starts debt talks

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

French IT services company Atos is to enter talks with creditors after saying it can no longer go through a €720mn equity fundraising that was destined to shore up its balance sheet.

The Paris-based group, which faces €2.25bn debt payments next year, said on Monday it had appointed a mediator to oversee refinancing negotiations with lenders. Under French law, the move is a voluntary step before a potential court-supervised debt restructuring.

Shares fell nearly 25 per cent in Paris to €2.95, giving the company a market capitalisation of €329mn.

Atos’s financial difficulties have been deepening and its shares have lost 96 per cent of their value in the past three years amid a rapid churn of executives and mounting debt load.

The outcome of these negotiations could include a new refinancing plan, asset disposals, and “possible changes in [Atos’s] capital structure which could result in a dilution of the existing shareholders”, the company said in a statement. The process is “an amicable procedure allowing negotiations to be conducted within a confidential framework”, it added.

The now cancelled rights issue was planned as part of a plan to split the company and sell its lossmaking legacy IT business to Czech billionaire Daniel Křetínský. The deal was announced in August.