The French IT Firm Atos Struggles for Its Future, Warning of Rising Debt and Deeper Net Loss Which is Exacerbated by Recent Failures in Attempting to Divest Assets. On Tuesday, Atos Announced That It Expects Its Audit Report to Contain a So-Called 'Going Concern' Warning, Highlighting Uncertainty Over the Company's Ability to Continue Operations.
The company emphasized that it has sufficient liquidity to maintain operations and is working on a refinancing plan with its creditors, which should be implemented by July. However, reaching this agreement is not guaranteed. "All these circumstances create a substantial uncertainty about the group's ability to continue its business operations if the group fails to negotiate a new refinancing plan or implement a significant asset disposal plan," the company stated.
Atos did not provide an outlook for 2024, citing the possibility of asset sales and refinancing talks, and withdrew its projections for 2026 for the same reasons. Weeks after talks to sell major parts of its business failed, Atos reported that its net debt at the end of 2023 stood at 2.23 billion euros, compared with 1.45 billion euros a year earlier.
The company's net loss widened to 3.44 billion euros last year, compared with a loss of 1.01 billion euros in 2022. The company pointed to an impairment of 2.55 billion euros, one of the reasons for the delay in its earnings report.
Atos experienced turbulent years, lost two CEOs in 2021 and 2022 following a failed takeover attempt and multiple profit warnings that shook investor confidence.
The company accumulated debt and negotiated over the last few months about the sale of its Tech Foundations business to an investment firm controlled by Czech billionaire Daniel Kretinsky for 2 billion euros and its cybersecurity unit to Airbus for up to 1.8 billion euros.
Both Negotiation Efforts Ended in Recent Weeks without Agreements, and Atos Postponed its Annual Financial Statement, Originally Scheduled for February 29, Twice in Order to Assess its Next Steps and to Give the Auditors More Time to Work on a Non-Cash Goodwill Impairment.
David Layani, Board Member and CEO of Major Shareholder Onepoint, Suggested a Restructuring Plan Without Asset Sales in an Interview with the French Publication Le Figaro. Atos Stated That It Would Analyze a Plan Should and Once It Receives One from Layani.
Last month, S&P Global lowered its ratings for Atos for the third time in less than a year, saying that the group may face challenges or delays in addressing its liquidity shortfall. Atos will inform the market about its refinancing plan in the week of April 8th.
