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Negotiations between highly indebted IT services company Atos and its lenders are hanging in the balance after one of its biggest creditors, Crédit Agricole, signalled it wanted to walk away.
Crédit Agricole has for several weeks said it no longer wanted to refinance the group, according to three people with knowledge of the talks, dealing a blow to debt negotiations aimed at pushing back €3.65bn in debt payments due by the end of 2025 by several years.
Crédit Agricole “have been wanting to get out for some time now . . . it’s been at least three weeks that they’ve really wanted to get out”, said one person with knowledge of the situation.
The setback points to growing fractures among creditors as Atos’ underlying business and financial situation rapidly deteriorate.
Under the leadership of recently appointed chair Jean Pierre Mustier, Atos is trying to refinance and avoid a wider debt restructuring that could wipe out shareholders. On Monday, the company appointed a mediator to oversee talks with creditors — a voluntary step before a potential court-supervised debt restructuring — which caused shares to plunge almost 30 per cent.
Once a French corporate champion with prized assets such as supercomputers and sensitive contracts with the French military, attempts to split the group and sell assets to pay down debt have faltered after a series of strategic mis-steps and management changes. In the past three years, the company has had five chief executives, issued a series of profit warnings and shed 90 per cent of its market capitalisation.
A plan to split the company and sell its loss-making legacy business to Czech billionaire Daniel Křetínský is foundering. Talks have been at a standstill for weeks, though neither side is yet willing to declare the deal officially dead, according to multiple people with knowledge of the negotiations.
As concerns over the debt burden at Atos have mounted and the Křetínský deal stalled, Mustier has explored a back-up plan by starting talks to sell the company’s prized big data and cyber security unit, BDS, to Airbus. A deal with Airbus would take time to finalise, however, since the parties only recently began due diligence.
Crédit Agricole’s stance on the company’s refinancing contrasts with the accommodating position often taken by French banks to big corporate clients. The country’s top lenders tend to extend lifelines during corporate blow-ups and remain longer than foreign banks, as with the slow-motion downfall of food retailer Casino.
Crédit Agricole is one of the biggest French lenders to Atos in a group of banks that also includes BNP Paribas, Natixis, Credit Mutuel CIC and Société Générale. Together, the banks make up roughly 40 per cent of Atos’ creditors.
Other lenders were also disenchanted with Atos’ situation but more inclined to proceed with refinancing and find a solution by extending fresh funds, the people close to the talks said.
Crédit Agricole’s position could have a ripple effect on other smaller foreign bank lenders, which were also on the fence about re-extending credit lines to the group, the people added. If it fails to secure a voluntary extension of bank loans, Atos is likely to be forced into the French equivalent of a bankruptcy proceeding, which would involve a debt-for-equity swap.
Distressed debt investors are now circling Atos, including hedge fund Attestor, which has bought some of the company’s debt. “Everyone is testing the market, but to date the prices have been too low for the banks,” the person with knowledge of the talks said.
Crédit Agricole, Atos, Attestor and the French bank lenders declined to comment. Crédit Agricole’s stance was first reported by online publication L’Informé.