ATOS cancelled a planned 720 million euros (S$1 billion) rights offfering and requested a court-appointed mediator to help with refinancing negotiations with banks. The shares plunged as much as 30 per cent to a record low.

The embattled French IT company said conditions for the rights offering were “no longer applicable” and that a standby underwriting commitment from BNP Paribas and JPMorgan was also no longer in effect, according to a statement on Monday (Feb 5).

That means the company is under increased pressure to negotiate a restructuring with its creditors ahead of a wall of debt maturities. Atos has 1.25 billion euros of bonds due by May 2025 and 2.4 billion euros of bank debt also maturing next year.

The capital increase had initially been announced in August, as part of a proposed deal to sell Atos’s legacy unit Tech Foundations to Czech billionaire Daniel Kretinsky’s EPEI. The talks with EPEI continue, Atos said, as do those with Airbus about a potential sale of its big data and cybersecurity business.

Shares plunged 26 per cent to 2.9 euro in Paris trading at 10.50 am after earlier touching 2.75 euro, its lowest-ever level and biggest intraday decline since June 2022.

Atos said it would keep the market updated on the discussions with its banks, its new refinancing plan, its contemplated disposals, as well as “the possible changes in its capital structure which could result in a dilution of the existing shareholders.” It also said it’s requested a court-appointed mediator, known as a “mandataire ad hoc” to help with the refinancing negotiations.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

A group of lenders including BNP Paribas have engaged Ondra Partners as financial adviser and Gibson, Dunn & Crutcher as legal adviser, while a group of bondholders is working with investment bank Messier & Associes and law firm Willkie Farr & Gallagher to advise them on the talks with the company.

Atos, which employs about 105,000 people globally, comprises a legacy IT outsourcing business as well as supercomputing and cybersecurity services deemed strategically important by the French government.

The group was slow to adapt as the industry shifted towards the cloud, and has faced a series of setbacks and governance changes in recent years that sent its shares tumbling. Its market value has fallen from 8.2 billion euros at the end of 2020 to 438 million euros at Friday’s close.

Last month, the company appointed its fifth chief executive officer in two-and-a-half years, following a disagreement between the board and outgoing leader Yves Bernaert over a turnaround strategy. BLOOMBERG