Governance & Risk Management , Government , Industry Specific

Atos Secures 1.675 Billion Euros in Financing to Stay Afloat

French IT consultancy Atos has raised 1.675 billion euros to restructure its debt as the company is set to finalize its takeover bid by the French government.

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The Paris-based company is the world's largest managed security services vendor, serving public and private-sector clients. On Monday, the company announced it has raised the financing as part of a lock-up agreement with a group of banks and company bondholders, which currently hold over 50% of the debt.

As part of the latest deal, Atos received 800 million euros to keep the business running. The company can currently access 440 million euros. Atos will receive an additional 350 million euros toward the end of July.

The deal will allow remaining Atos creditors to participate in the agreement until July 22.

"We have successfully reached an agreement on our financial restructuring plan. We have also secured near-term liquidity for the company as well as long-term financing necessary to fund the business. With this plan, Atos will have an improved financial position and a stronger credit profile," said Atos CEO Paul Saleh.

The latest deal comes after a planned restructuring plan led by Paris-based Onepoint failed. The company is currently struggling to pay down over 2 billion euros in debt driven by customers moving from on-premises IT services to cloud-based services.

The deal also follows two failed takeover bids by European aerospace giant Airbus (see: Airbus Backtracks From Planned Atos Cybersecurity Takeover).

Atos in April received "a non-binding confirmatory offer letter" from the French government about acquiring the advanced computing and cybersecurity units of the company's loss-making Big Data and Security division (see: French Government Bids on Atos' Cyber and Computing Assets).

The deal includes protecting the nation's "sovereign interests." Atos said subsidiary Bull SA will issue the French government a "preferred share" allowing it nonvoting representation on corporate bodies and prior authorization and approval rights (droits d'autorisation préalable et d'agrément) designed to protect sovereign sensitive activities."