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Atos Mulls Revised Terms for Křetínský Deal on IT Services Unit

Atos Mulls Revised Terms for Křetínský Deal on IT Services Unit

Atos Mulls Revised Terms for Křetínský Deal on IT Services Unit

Atos Mulls Revised Terms for Křetínský Deal on IT Services Unit

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  • Atos in talks to renegotiate deal with Czech billionaire to sell lossmaking IT services business.

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    Atos seeks funds to service debt, considering asset sales.

  • Atos’s credit rating downgraded due to liquidity risks.

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French IT services company Atos is renegotiating the terms of a deal with Czech billionaire Daniel Křetínský to buy the company’s lossmaking IT services business Tech Foundations. The company is seeking to raise funds to service its debt, which totals €2.25 billion and is maturing in 2025.

Atos said on Tuesday that it had relaunched talks over the agreement and would consider additional asset sales and tapping debt and equity markets to address its capital raising plans. The company’s market value has slumped by more than 90 percent in the past three years to €651 million.

The new round of exclusive negotiations with Křetínský is aimed at recalibrating a summer deal under which the Czech tycoon would take over Tech Foundations and anchor a €900 million capital raise in Atos’s prized cybersecurity and supercomputing business Eviden. Investors, defense officials, and politicians balked at the arrangement, notably for national security reasons. Eviden houses supercomputers that run models for France’s nuclear arsenal, and French politicians and officials objected to having a foreign investor in the share capital.

Křetínský had also agreed to invest based on a €20-a-share valuation for Eviden, far above the €5.80 level at which they are currently trading. People close to Křetínský have said negotiations will focus on getting him out of the Eviden leg of the deal.

The negotiations are “principally around the price for Tech Foundations,” the person said, the idea being that some portion of the €215 million originally destined for the capital raise in Eviden would be reallocated to the purchase price for the legacy business. Investors in Atos, including recently arrived lead shareholder OnePoint, have said the agreed price was too low.

Under the terms of the August deal with Křetínský, Eviden would receive €100 million in net cash while Tech Foundations would be recapitalised by the Czech businessman to the tune of €800 million. It would also get €800 million in working capital from its former parent.

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Other parties, including defense contractors Airbus and Thales, have previously expressed interest in purchasing parts of Atos’s cybersecurity and supercomputing businesses. Dassault Aviation has also been monitoring the situation. Negotiations for Airbus to take a minority stake in Eviden foundered under pressure from the aerospace group’s shareholders this year. Thales has stated that it is no longer interested in Atos’s assets.

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