Atos falls 18% as embattled French IT firms weighs rescue deals set to result in ‘massive dilution’

The two restructuring deals on the table are led by Czech billionaire Daniel Kretinsky and key Atos shareholder David Layani. The company will make its choice by Wednesday.

“The implementation of the proposals will result in all cases in a massive dilution of the existing shareholders of Atos SE,” Atos said in a statement on Monday.

The company said it was working with financial creditors to secure maximum support for one of the deals by June 5, aiming to reach final agreement on restructuring in July.

Kretinsky previously carried out discussions with Atos about buying parts of its business, which collapsed. Layani’s IT consulting firm Onepoint held over 11% of Atos’ share capital and voting rights as of December 2023, according to their website.

The two proposals are the last two remaining in a months-long process of Atos considering potential restructuring deals. Four proposals had been posted on Atos’ website in May, including from Kretinsky’s EP Equity Investment in partnership with investment firm Attestor Limited, Layani’s Onepoint with investment company Butler Industries, Atos’ financial creditors and U.S. private equity firm Bain Capital.

Bain Capital’s deal was rejected by Atos, it said, while the company’s financial creditors joined forces with Layani.

The deals come after a string of failed talks about whole or partial acquisition of the Atos business. Airbus also held such discussions.

In April, Atos said it had received a letter of intent from the French government to potentially acquire parts of its business. At the time, the firm said a non-binding offer could be made in early June. On Monday, Atos noted that due diligence on the deal was still ongoing.

Atos holds several sensitive contracts with French authorities and the country’s military. It is also managing data and cybersecurity for the Paris 2024 Olympic games.

The firm has been facing mounting financial troubles for some time, including soaring debt. At the end of the first quarter, Atos’ net debt stood at 3.9 billion euros ($4.2 billion), the company said in April.