Market Update - June 30, 2024
Press release
Market update
Agreement reached on financial
restructuring terms between the Company and a
group of banks and bondholders
Significant milestone towards reaching a
final restructuring agreement by July
Main terms of Atos’ financial
restructuring plan:
- Contribution of €233 million by way
of a capital increase with preferential subscription right, €75
million of which is backstopped by the bondholders participating to
the new financings (described below) in cash and €100 million is
backstopped by the Participating Creditors by debt
equitization
- Equitization of €2.8 billion of
Atos financial debt (plus accrued and unpaid interests), bringing
the total amount of converted debt into equity to €2.9 billion
- Net indebtedness reduced by circa
€3.1 billion in line with the objective of a BB credit profile by
2026, which assumes a financial leverage1 of circa 2x by year-end
2026
- Contribution between €1.5 billion
to €1.675 billion in new secured financings (new money debt),
allocated equally between bank creditors and bondholders of
Atos
Implementation of the proposed financial
restructuring plan will result in massive dilution of Atos existing
shareholders
Existing shareholders will be able to
participate in the contemplated share capital
increases
Re-opening of syndication period for
interim financing (additional tranches of €225 million and €350
million) to 3 July 2024, 1:00pm (Paris time)
Opening of the syndication period for
new secured financings of between €1.5 billion and €1.675 billion
as of today
Paris, France – June 30, 2024 –
Atos SE (“Atos” or the “Company”)
announces today that it has reached an agreement on the main terms
of a financial restructuring plan (the
“Agreement”) with a group of banks and bondholders
of the Company.
The Board of Directors of Atos has concluded,
under the aegis of the Conciliator, that this Agreement is
consistent with the financial parameters outlined by the Company.
It provides for the conclusion of a binding lock-up agreement2
between the Company and a group of banks and bondholders and the
other financial creditors willing to support the Agreement during
the week of July 8, 2024, enabling the opening of a dedicated
accelerated procedure3 from the week of July 22 and a targeted
effective completion of all restructuring operations by the end of
2024.
The Agreement also provides for the preservation
of the Group’s perimeter, subject to the conclusion of ongoing
negotiations (i) with the French State for the disposal of the
Advanced Computing, Mission-Critical Systems and Cybersecurity
Products activities of Atos SE’s BDS (Big Data & Cybersecurity)
division, and (ii) with Alten for the disposal of Worldgrid.
The Agreement is posted today on the Atos’
website and is accessible via the following link:
https://atos.net/en/investissors.
The Company will now be working with all the
relevant parties involved with a view to finalizing the contractual
documentation formalizing the Agreement, including the lock-up
agreement.
As indicated in its previous communications, the
Company reminds that the implementation of the contemplated
financial restructuring plan will result in massive dilution for
existing Atos shareholders, who should, if they do not participate
in the envisaged share capital increases, hold less than 0.1% of
the share capital.
Main terms of the financial
restructuring plan
The Agreement is consistent with the key
financial parameters outlined by the Company in April and aligns
with the interest of the Company’s stakeholders, particularly its
employees and clients.
It shall enable the Company to have a stronger
capital structure through:
-
A rights issue with maintenance of the preferential subscription
rights for existing shareholders, for an amount of €233 million, at
a reduced subscription price compared to the Equitization Capital
Increases (to the extent legally permissible), with €75 million in
cash backstopped by bondholders participating in the new financings
(described below) and €100 million backstopped by the creditors
participating in the new financings (the “Participating
Creditors”) by set off against the portion of their
respective debts (the “Rights Issue”), any cash
proceeds resulting from the subscription to this Rights Issue will
be kept in full by the Company for the purpose of financing its
business operations;
-
If the €100 million backstop by set-off against their respective
debts provided by the Participating Creditors in the Rights Issue
is not called up in full, the amount remaining to be subscribed
shall be equitized on terms similar to those for the Rights Issue,
through a capital increase without preferential subscription right
reserved to them (with, if applicable4, a priority period (délai de
priorité) for the benefit of existing shareholders), by way of debt
equitization (the “Potential Capital Increase”).
Participating Creditors will also have the option to fund, as part
of the Potential Capital Increase, an additional amount of cash up
to €75 million (the “Optional Additional Equity”);
-
The equitization of €2.8 billion (in addition to the €100 million
previously equitized) of Atos’ financial debt increased by the
amount of accrued and unpaid interests due to Atos’ financial
creditors as from the opening of the accelerated safeguard
procedure, through two share capital increases without preferential
subscription right, one reserved to the Participating Creditors
(with, if applicable5, a priority period (délai de priorité) for
the benefit of existing shareholders), the other reserved to
creditors not participating in the new financing (the
“Non-Participating Creditors”) (with, if
applicable6, a priority period (délai de priorité) for the benefit
of existing shareholders) (the “Equitization Capital
Increases”). The Equitization Capital Increase reserved to
Non-Participating Creditors will be offered on less favorable
conditions than the one offered to Participating Creditors. Any
cash proceeds resulting from the subscription by existing
shareholders to these Equitization Capital Increases under their
priority rights will be used in full to repay the Company’s
relevant unsecured financial creditors at par value in due
proportion;
(together the “Financial Restructuring
Capital Increases”)
-
A contribution between €1.5 billion and €1.675 billion of new
secured financings (new money debt) (depending on the amount of
cash subscriptions to the Rights Issue and of the Optional
Additional Equity as part of the Potential Capital Increase) to be
subscribed in equivalent proportions by (i) the bank creditors
holding at the Record Date (as defined below) debt under the €1.5
billion term loan A maturing in January 2025 and the €900 million
revolving credit facility maturing in November 2025 (the
“Loans”) and (ii) the bondholders holding at the
Record Date bonds issued by Atos maturing in 2024, 2025, 2026, 2028
and 2029 (the “Bonds”).
The aim of these transactions is to secure the
Group’s future financial equilibrium, with a reduction in net debt
by circa €3.1 billion, that should enable the Company to achieve
its target to regain a BB credit rating profile by 2026.
These transactions will guarantee minimum
liquidity amount of €1.1 billion until December 31, 2026.
Changes in shareholder structure
following the completion of the financial restructuring expected by
2024 year-end / Q1 2025
Following the completion of the financial
restructuring transactions described above, the Company emphasizes
that Atos’ financial creditors will become the Company’s main
shareholders.
The Agreement also provides the possibility for
the entry of a potential anchor investor as part of the Financial
Restructuring Capital Increases.
Pursuant to the Agreement, if:
a) No existing shareholder
subscribes to the Rights Issue;
b) No existing shareholder
subscribes to any of the other Financial Restructuring Capital
Increases during the priority period (délai de priorité) (if any),
and
c) Only the financial creditors
supporting the Agreement subscribe to the Financial Restructuring
Capital Increases under their respective backstop commitments,
the ownership percentages would be, according to
the principles set out in the Agreement and the valuations adopted
by the parties, as follows:
-
for the Company’s existing shareholders, below 0.1% following
completion of all the Financial Restructuring Capital
Increases;
-
for the Company’s financial creditors, circa 99.9% upon completion
of all the Financial Restructuring Capital Increases.
Assuming that all existing shareholders
subscribe to the Financial Restructuring Capital Increases,
the ownership percentages7 would be, according
to the principles set out in the Agreement and the valuations
adopted by the parties, as follows:
-
for the Company's existing shareholders, circa 25.9% upon
completion of all the Financial Restructuring Capital
Increases;
-
for the Company's financial creditors, circa 74.1% upon completion
of all the Financial Restructuring Capital Increases.
|
Existing shareholders (for their current
shareholding) |
Existing shareholders (for the shares subscribed under the
€233 million Rights Issue) |
Financial creditors |
100% participation in the €233 million Rights Issue8 |
0.05% |
25.83% |
74.12% |
0% participation in the €233 million Rights Issue |
0.06% |
- |
99.94% |
In view of the dilution expected to result from
the Financial Restructuring Capital Increases, the Board of
Directors of the Company will, on a voluntary basis pursuant to
Article 261-3 of the AMF General Regulation, appoint an independent
expert to issue an opinion on the financial restructuring. The
independent expert will assess the financial conditions of the
financial restructuring for shareholders and issue a report
containing a fairness opinion that will be made available to
shareholders.
It is specified that the banks and the
bondholders of the Company do not intend to act in concert
together.
Following the Financial Restructuring Capital
Increases, the Company will remain uncontrolled.
Conditions precedent and implementation
of the Agreement
The implementation of the financial
restructuring remains subject to the fulfilment of several
conditions precedent, including in particular:
-
Finalization and conclusion of the long form financial
restructuring documentation, including the accelerated safeguard
plan;
-
Approval by the AMF of the securities note (note d’opérations)
relating to the contemplated share capital transactions;
-
Receipt of a report from an independent expert confirming that the
terms of the proposed financial restructuring (including in
relation to the share capital increases) are fair from a financial
perspective in accordance with the AMF General Regulation, as
customary for transactions of this nature;
-
Judgment of the specialized Commercial Court of Nanterre (Tribunal
de Commerce spécialisé de Nanterre) approving the accelerated
safeguard plan implementing the definitive financial restructuring
agreement; and
-
Obtaining regulatory approvals, if applicable9.
Re-opening of syndication period for
interim financing (additional tranches of €225 million and €350
million) to July
3rd,2024
Following its press release dated June 20, 2024
and as part of its interim financing process, Atos today announces
the re-opening of the syndication period for the additional
tranches of €225 million and €350 million of facilities (with a
reallocation of banks’ participations within the factoring program
of €75 million) from June 30, 2024 to July 3rd, 2024 at 1.00 p.m.
Paris time.
The agreement on such additional tranches of
facilities remains subject to a waiver from the banks under the
€1.5 billion term loan of the Company and to an amendment to the
Facilities previously provided by a group of bondholders.
The Company reminds that the following are
invited to participate in the additional tranches of €225 million
and €350 million of facilities and the €75 million factoring
program:
- All the holders of the following
notes as at June 14, 2024, after close of market (the
“Record Date”) (the
“Bondholders”):
- 2024 Exchangeable Notes: €500
million of zero per cent. exchangeable bonds due 6 November 2024,
issued pursuant to terms and conditions dated 6 November 2019
admitted to clearing under number ISIN: FR0013457942;
- 2025 Notes: €750 million 1.75 per
cent. bonds due 7 May 2025, issued pursuant to a prospectus dated 5
November 2018 admitted to clearing under number ISIN:
FR0013378452;
- 2026 Notes: €50 million NEU MTN
(Negotiable European Medium-Term Note) due 17 April 2026, issued
pursuant to the €600,000,000 Negotiable European Medium-Term Note
program admitted to clearing under number ISIN: FR0125601643;
- 2028 Notes: €350,000,000 2.50 per
cent. bonds due 7 November 2028, issued pursuant to a prospectus
dated 5 November 2018 admitted to clearing under number ISIN:
FR0013378460;
- 2029 Notes: €800 million 1.00 per
cent. sustainability-linked bonds due 12 November 2029, issued
pursuant to a prospectus dated 10 November 2021 admitted to
clearing under number ISIN: FR0014006G24;
- All the lenders under the following
credit facilities as at the Record Date (the
“Banks”):
- Term loan A: €1.5 billion term loan
facility agreement dated July 2022 maturing in January 2025;
- RCF: €900 million revolving
facility agreement dated November 2014 maturing in November
2025.
The additional tranche of €225 million of
revolving credit facility (to be drawn shortly after close of
syndication) will be allocated between Banks and Bondholders as
follows:
- €125 million to be provided by
Banks;
- €100 million to be provided by
Bondholders.
The additional tranche of €350 million of
revolving credit facility (to be drawn by end of July, subject,
inter alia, to signing of a lock-up agreement in respect of the
financial restructuring and the entry into a dedicated accelerated
procedure10) will be allocated between Banks and Bondholders as
follows:
- €175 million to be provided by
Banks;
- €175 million to be provided by
Bondholders.
As part of the reduction of the factoring
program agreed in principle to €75 million, the participation in
this program will be reallocated among the Banks with effect
shortly after the closing of the syndication.
All the Banks and Bondholders willing to
participate in these additional tranches of €225 million and €350
million of facilities and in the €75 million factoring program are
invited to formalize their commitment by filling-in the following
form by July 3rd, 2024 at 1.00 p.m Paris time via:
https://forms.kroll.com/orbeon/fr/is/atos-form/new?form-version=1.
Banks and Bondholders who have already
participated and completed their form will be able to modify their
response form by July 3rd, 2024 at 1:00 p.m. Paris time. To this
end, Banks and Bondholders willing to modify their earlier response
are invited to contact Kroll to have their initial form deleted.
They will then be able to formalize a new commitment by filling-in
a new form via the same link:
https://forms.kroll.com/orbeon/fr/is/atos-form/new?form-version=1.
Following its press release dated June 20, 2024,
Bondholders willing to participate in the additional tranches of
€225 million and €350 million of facilities will have to provide
proof of holding as at the Record Date to Kroll and to sign a
cooperation agreement.
Information concerning the additional tranches
of €225 million and €350 million of facilities and the €75 million
factoring program to be provided (including a new version of the
agreement between the Company and its financial creditors) is
accessible on the following website:
https://deals.is.kroll.com/atos.
Opening of the syndication period for
New Secured Financings of between €1.5 billion and €1.675 billion
as of today
As announced in its press release of June 13,
2024 and in connection with the provision of secured new money debt
under the Agreement in an amount from €1.5 billion to €1.675
billion in the form of new secured financings (the “New
Secured Financings”) as well as €75 million in the form of
backstop in cash of the Rights Issue (the “Equity
Financings Backstop”, together with the New Secured
Financings, the “New Financings”), Atos announces
today the opening of a first syndication period for the New
Financings.
Are invited to participate in the New Financings
all the Bondholders and Banks as at the Record Date.
The New Secured Financings will be allocated
between the Banks and the Bondholders as follows:
-
between €750 million and €837.5 million by the Banks (including
between €250 million and €337.5 million in the form of term loans,
€250 million in RCF and €250 million in bank guarantees);
-
between €750 million and €837.5 million by Bondholders in the form
of a new bond issue.
Equity Financings Backstop may only be
subscribed by Bondholders (for the avoidance of doubt, the Optional
Additional Equity will be open to all Bondholders and Banks).
Bondholders willing to participate in the New Secured Financings
will be required to participate in the Equity Financings for an
equivalent proportion.
For Bondholders, syndication of
the New Financings will be carried out as follows;
-
until July 3rd, 2024 at 1.00 p.m. Paris time, Bondholders have the
option:
-
to subscribe, pro rata to their Bonds’ holdings at the Record Date,
to the New Secured Financings allocated to Bondholders and to
backstop, for an equivalent proportion, the subscription to the
Equity Financings;
-
to underwrite, pro rata to their Bonds’ holding at the Record Date,
the portion of New Secured Financings allocated to Bondholders not
subscribed at the end of the syndication period.
-
for a period of ten business days following the signature of the
lock-up agreement, Bondholders will have the opportunity to
subscribe, pro rata only to their Bonds’ holding at the Record
Date, to the New Secured Financings allocated to Bondholders.
For the Banks, syndication of
New Equity Financings will be carried out as follows:
-
until July 5, 2024 at 11:59 p.m. Paris time, the Banks have the
option of backstopping, underwriting and contributing all or part
of the New Secured Financings allocated to the Banks (i.e. up to
€837.5 million);
-
for a period of ten business days following signature of the
lock-up agreement, the Banks that did not participate in the first
phase will be able to subscribe to the New Secured Financings,
within the limit of their pro rata only to their Loans’ holdings at
the Record Date allocated to Banks.
All Banks and Bondholders wishing to participate
and backstopping the subscription to this New Financings under the
conditions set out above are invited to formalize, by July 3rd,
2024 1.00 p.m. Paris time in respect of the Bondholders and by July
5, 2025 11:59 p.m. Paris time in respect of the Banks, their
commitment by completing the following form:
https://forms.kroll.com/orbeon/fr/is/atos-form-backstop/new?form-version=1.
A new syndication period will be opened after
signature of the lock-up agreement to allow all Bondholders and
Banks to participate in these financings on a pro rata basis.
Bondholders wishing to participate in these New
Financings will be required to provide Kroll with proof of their
ownership as at the Record Date and to sign a cooperation
agreement.
The terms and conditions of the New Financings
are set out in the Agreement published on the Company’s website.
Further information concerning the New Financing will be available
to Banks and Bondholders via the following website:
https://deals.is.kroll.com/atos.
Next steps
As indicated in its press release of June 26,
2024, the Company expects that:
-
The lock-up agreement allowing all financial creditors to support
the proposed restructuring plan would be expected during the week
starting July 8; and
-
The accession to the lock-up agreement would be open from the week
starting July 8 to the week ending July 22.
The definitive financial restructuring agreement
with the financial creditors would then be implemented through a
dedicated accelerated procedure11 from the week starting July
22.
The restructuring operations will then be
implemented during the second half of 2024 with a view to effective
completion by the end of 2024 / Q1 2025.
*
Atos SE confirms that information that could be
qualified as inside information within the meaning of Regulation
No. 596/2014 of 16 April 2014 on market abuse and that may have
been given on a confidential basis to its financial creditors has
been published to the market, either in the past or in the context
of this press release, with the aim of re-establishing equal access
to information relating to the Atos Group between the
investors.
***
Disclaimer
This document contains forward-looking
statements that involve risks and uncertainties, including
references, concerning the Group’s expected growth and
profitability in the future which may significantly impact the
expected performance indicated in the forward-looking statements.
These risks and uncertainties are linked to factors out of the
control of the Company and not precisely estimated, such as market
conditions or competitors’ behaviors. Any forward-looking
statements made in this document are statements about Atos’s
beliefs and expectations and should be evaluated as such.
Forward-looking statements include statements that may relate to
Atos’s plans, objectives, strategies, goals, future events, future
revenues or synergies, or performance, and other information that
is not historical information. Actual events or results may differ
from those described in this document due to a number of risks and
uncertainties that are described within the 2023 Universal
Registration Document filed with the Autorité des Marchés
Financiers (AMF) on May 24, 2024 under the registration number
D.24-0429. Atos does not undertake, and specifically disclaims, any
obligation or responsibility to update or amend any of the
information above except as otherwise required by law.
This document does not contain or constitute an
offer of Atos’s shares for sale or an invitation or inducement to
invest in Atos’s shares in France, the United States of America or
any other jurisdiction. This document includes information on
specific transactions that shall be considered as projects only. In
particular, any decision relating to the information or projects
mentioned in this document and their terms and conditions will only
be made after the ongoing in-depth analysis considering tax, legal,
operational, finance, HR and all other relevant aspects have been
completed and will be subject to general market conditions and
other customary conditions, including governance bodies and
shareholders’ approval as well as appropriate processes with the
relevant employee representative bodies in accordance with
applicable laws.
About Atos
Atos is a global leader in digital
transformation with c. 94,000 employees and annual revenue of c. €
11 billion. European number one in cybersecurity, cloud and
high-performance computing, the Group provides tailored end-to-end
solutions for all industries in 69 countries. A pioneer in
decarbonization services and products, Atos is committed to a
secure and decarbonized digital for its clients. Atos is a SE
(Societas Europaea), and listed on Euronext Paris.
The purpose of Atos is to help design the future
of the information space. Its expertise and services support the
development of knowledge, education and research in a multicultural
approach and contribute to the development of scientific and
technological excellence. Across the world, the Group enables its
customers and employees, and members of societies at large to live,
work and develop sustainably, in a safe and secure information
space.
Contacts
Investor relations: David Pierre-Kahn | investors@atos.net | +33
6 28 51 45 96
Individual shareholders: 0805 65 00 75
Press contact: globalprteam@atos.net
1 Ratio net debt pre-IFRS16 over EBITDA pre-IFR16; EBITDA
computed as OMDA pre-IFRS16 minus anticipated RRI (restructuring,
rationalization, integration) costs and other changes.
2 The contractual documentation will comprise in
particular a lock-up agreement, which is an agreement under the
terms of which the signatories undertake to support and carry out
any steps or actions reasonably necessary for the implementation
and completion of the Company’s financial restructuring. This
agreement makes it possible to secure the support of restructuring
stakeholders who are not directly involved in the discussions.3 The
Company may request the opening of accelerated safeguard
proceedings – whose effects would be limited to financial creditors
and shareholders only – with the sole view to implement and obtain
a Court approval on the terms of the financial restructuring plan
agreed in the lock-up agreement. The accelerated safeguard
proceedings would concern only the financial indebtedness of Atos
and would not impact in any way suppliers, employees, the
governance of the Company, or other creditors of the Company or its
subsidiaries.4 If the shareholders vote against the proposed
accelerated safeguard plan. If the existing shareholders subscribe
to the Potential Capital Increase within the priority period (délai
de priorité), under the conditions of Article L.22-10-51 of the
French commercial code, the new shares would be subscribed at the
same price as those to be subscribed by the Participating Creditors
in the Potential Capital Increase.5 If the shareholders vote
against the proposed accelerated safeguard plan. If the existing
shareholders subscribe to the Equitization Capital Increases within
the priority period (délai de priorité), under the conditions of
Article L.22-10-51 of the French commercial code, the new shares
would be subscribed at the same price as those to be subscribed by
the Participating Creditors or the Non-Participating Creditors (as
the case may be) in the Equitization Capital Increases.6 See
footnote 5. 7 On a fully diluted basis.
8 On a fully diluted basis (including the full
exercise of the option to inject EUR 75m in cash as part of the
Potential Capital Increase).9 Ongoing analysis by the parties of
the need to obtain any potential regulatory approvals required to
implement the contemplated transactions.
10 See footnote 311 See footnote 3
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