French IT firm Atos has rattled investors by delaying the release of its 2023 earnings report at the eleventh hour, as it reels from the hammer blow of Czech billionaire Kretinsky pulling out from buying its Tech Foundations business.
Atos on Wednesday announced that it would push its earnings report back to March 20. The timing of the announcement, just a day before the report was due, wrong-footed investors, lawyers said.
“It’s very weird,” said a restructuring partner at a Paris-based law firm. “By changing the earnings date last-minute, only disclosing the partial results in advance and announcing an investor call 20 minutes before it's meant to begin -- it all points to strange behaviour”.
The partner said that a client reported back to him that the call was very poorly attended and that the situation had provoked ill-felling towards the company.
A second restructuring partner said the earnings delay from a French company was near unprecedented.
"[I have not seen this] in my 20-year career in restructuring in France," he said.
Atos disclosed that the company had halted discussions with Kretinsky for Tech Foundations after the two groups failed to agree on terms and pricing.
Lawyers said the failed sale is concerning, as it would mean clients running from shareholders to creditors will have to stump up some of the cash required to cover the company’s €4.7bn debt pile.
“It’s worrying because I suspect the delay in earnings is so that the company can go to the creditors and ask for new money,” said the second restructuring partner.
“They are not able to reset the business plan without saying how they will plan to fund it, given Kretinsky’s money is out of the picture. This will slow down the overall refinancing or restructuring process.”
In response, a spokesperson from Atos said: “Atos will continue to run Tech Foundations and Eviden as separate businesses and leverage the strengths of their respective offerings with a coordinated go-to-market strategy. Atos will continue to consider strategic options that are in the best interest of its customers, employees and shareholders.”
Minority shareholder consulting firm Onepoint, which holds 10% of Atos’ shares, appointed White and Case as their legal advisers, sources told LPC.
Separately Atos is planning a possible sale of its cybersecurity division BDS to aerospace manufacturer and designer Airbus. Lawyers expect the proposed proceeds of €1.5bn to €1.8bn from the sale will not be enough to cover Atos' upcoming debt maturities.
“We are hearing the company will receive some money from the Airbus sale before March 20," said the second restructuring partner.
"They may have timed it to put out a report to [mollify] investors by saying they are thinking of using the Airbus sale to help partially pay down their upcoming term loan and 2025 bond. The problem is Airbus knows they are the only bidders; Atos is likely to get below the €1.5bn suggested."
Atos has a €1.5bn term loan A maturing in July 2024 and a €750m unsecured bond due in May 2025.
Average bids for its €900m November 2025 revolving credit facility were trading at 36.58% on February 27, down from 36.77% on February 22 -- the lowest point since the deal was originally executed in October 2023, according to LPC data.
Bondholders are waiting on an independent business review of Atos conducted by advisory firm Accuracy. They expect to receive the report next week at which point they will kick start discussions with the company.