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French IT firm Atos falls 12%, faces major share dilution after selecting rescue deal
This photograph taken on April 26, 2024 shows the headquarters of French information technology multinational ATOS in Bezons, near Paris. (Photo by Ludovic MARIN/AFP) (Photo by LUDOVIC MARIN/AFP via Getty Images)
Ludovic Marín | Afp | Getty Images
Shares in the beleaguered French IT company Acts fell about 12% on Tuesday after the company he said he had chosen one rescue agreementwhich is expected to result in a major dilution of existing shareholders.
Shares last fell 11.8% at 10:51 a.m. London time.
Atos said it would proceed with a proposal from major shareholder David Layani, whose IT company Onepoint held around 11% of Atos’ share capital and voting rights as of December 2023, according to its website. Atos was also considering a rival bid from Czech billionaire Daniel Kretinsky.
The deal, however, will lead to “massive dilution” of existing shareholders, who are expected to hold less than 0.1% of the share capital when completed, Atos said.
Atos said the Layani deal included a stronger capital structure and provided the company with sufficient financial liquidity to remain in business.
“The proposal presented by the Onepoint consortium also has the support of a large number of Atos’ financial creditors and thus gives greater confidence that a definitive financial restructuring agreement will be reached,” stated the company.
Layani said on Tuesday that the deal partners wanted to improve Atos’ balance sheet and ensure the company becomes a major international player in the technology sector, Reuters reported.
Layani’s deal is led by Onepoint, as well as investment firm Butler Industries, IT firm Econocom and some of Atos’ financial creditors. It is expected to be implemented by July.
Atos manages data and cybersecurity for the Paris 2024 Olympic Games and holds several sensitive contracts with the French military and other authorities.
For some time now, the country has been facing increasing financial problems, including mounting debt, with its net debt standing at 3.9 billion euros (4.2 billion dollars) at the end of the first quarter.
Atos has discussed several deals throughout its financial difficulties, with several large companies, including Airbus, showing interest. Earlier this year, Atos also said it had received a letter of intent from French government will acquire parts of your business.