On Monday, Renault shares experienced a gain of over 4%, prompted by speculation in the media about a possible merger with rival Stellantis. According to undisclosed financial sources, the Italian newspaper Il Messaggero reported on Sunday that France is contemplating a merger between the two companies to enhance its influence in the automotive sector and counter competition from China and Germany.
The tech firm had been under pressure from bond investors to take steps to reduce its debt load ahead of the January 2025 maturity of a 1.5 billion euro term loan and 750 million euros in bonds, sources familiar with the matter told Reuters. Atos had been expected to sell the loss-making legacy business TFCo and its associated assets to a new group backed by Czech billionaire Daniel Kretinsky’s EPEI to help it leverage and improve its credit profile.
However, a deal has proved elusive, with EPEI unwilling to invest as much as Atos had hoped and only willing to take on part of the company’s corporate debt. Atos said it would now seek to raise capital in other ways, including by putting more of its non-performing businesses up for sale than the 400 million euros of divestments announced in July.
Atos aims to use the proceeds of any sales and capital increases to reduce its debt and leverage while strengthening the balance sheet of its planned new spinoff group, Eviden. It added that it would also consider obtaining the necessary loan waivers from its bank syndicate.
A senior source close to the company said Atos was in talks with its banks and could still do a deal by early next year, despite a warning from S&P Global Ratings on Monday that it would downgrade the company to ‘BB-‘ if it were not able to get financing in place soon. “The banks have been notified of our intention to move quickly on a funding solution for refinancing our financial debt,” the source said without further details.
Atos’s stock dropped by about 25% on June 14, the day the company announced its plan to split into two publicly listed companies. It has since slipped further, indicating investors think the business will be less profitable or successful as two parts than as one. Investors will be looking to see if the new company can deliver on a promise of continuity of service for customers, a crucial test of its ability to make money. It is expected to hire a head of continuity services in the coming weeks. The new role is key for Atos, which has many large corporate clients such as Airbus. Its chief executive, Franck Riboud, has been seeking to revive its share price, which has languished on the Paris stock exchange for a year. The company has lost about a quarter of its value this year.