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French IT services company Atos is to enter talks with creditors after saying it can no longer go through a €720mn equity fundraising that was destined to shore up its balance sheet.
The Paris-based group, which faces €2.25bn debt payments next year, said on Monday it had appointed a mediator to oversee refinancing negotiations with lenders. Under French law, the move is a voluntary step before a potential court-supervised debt restructuring.
Shares fell nearly 25 per cent in Paris to €2.95, giving the company a market capitalization of €329mn.
Atos’s financial difficulties have been deepening and its shares have lost 96 per cent of their value in the past three years amid a rapid churn of executives and mounting debt load.
The outcome of these negotiations could include a new refinancing plan, asset disposals, and “possible changes in [Atos’s] capital structure which could result in a dilution of the existing shareholders,” the company said in a statement. The process is “an amicable procedure allowing negotiations to be conducted within a confidential framework”, it added.
The now canceled rights issue was planned as part of a plan to split the company and sell its lossmaking legacy IT business to Czech billionaire Daniel Křetínský. The deal was announced in August.