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French IT firm Atos falls 12%, faces major share dilution after selecting rescue deal

This photo taken on April 26, 2024 shows the headquarters of French IT multinational ATOS in Bezons, near Paris. (Photo by Ludovic MARIN/AFP) (Photo by LUDOVIC MARIN/AFP via Getty Images)

Ludovic Marin | afp | fake images

Shares in troubled French IT company Atos fell about 12% on Tuesday after the company said it had chosen a rescue deal, which will result in significant dilution to existing shareholders.

Shares last fell 11.97% at 9:52 a.m. London time.

Atos said it would press ahead with a proposal from major shareholder David Layani, whose IT company Onepoint owned about 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.

However, the deal will lead to “massive dilution” of existing shareholders, who will hold less than 0.1% of the share capital once it is completed, Atos said.

Atos said the Layani deal included a stronger capital structure and provided the company with enough financial liquidity to remain in business.

“The proposal put forward by the Onepoint consortium is also supported by a large number of Atos’ financial creditors and therefore gives greater confidence that a definitive financial restructuring agreement will be reached,” the company said.

The Layani deal is led by Onepoint, as well as investment firm Butler Industries, IT company Econocom and some of Atos’ financial creditors. It is expected to be implemented in July.

Atos manages data and cybersecurity for the Paris 2024 Olympic Games and has several sensitive contracts with the French military and other authorities.

It has been facing increasing financial problems, including mounting debt, for some time; Its net debt stood at 3.9 billion euros ($4.2 billion) at the end of the first quarter.



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