HPC heavyweight Atos has given itself until June 5 - this Wednesday - to decide between rival financial restructuring proposals to reduce the company's debt and put its future finances on firmer footing.

The French IT services and consulting biz says it has received two revised proposals as part of the company's long-running efforts to become financially fit.

Atos had previously said it aimed to make a decision on financial restructuring by May 31, but the additional delay is most likely to allow it to assess the revised offers from the interested parties.

One is Czech billionaire Daniel Křetínský and his EP Equity Investment group (EPEI) in partnership with UK investment fund Attestor, while the other is a consortium comprising French IT services outfit Onepoint, Butler Industries, and Econocom, plus some of the company's creditors.

The EPEI-led proposal is for €500 million ($542 million) of new equity, plus a new financing package of €1.2 billion ($1.3 billion) and restructuring of existing debt. The Onepoint consortium is proposing that €2.9 billion of existing debt be converted to equity, plus it is offering €250 million of new equity and loans worth €1.5 billion.

Full details of the EPEI and Onepoint proposals [PDF documents] are available on the Atos Investors web page.

In a Market Update, Atos claims that both proposals are largely consistent with the financial parameters set by the company, which must cover debt reduction and near-term and mid-term financing needs. Atos must now work with creditors to choose one of these by June 5 with the aim of having a final financial restructuring agreement ready by July.

However, it warns that either proposal will result in a "massive dilution" for existing shareholders of Atos, meaning that their ownership of the company will be greatly reduced.

The Market Update confirms that Atos has secured the €450 million ($488 million) interim financing it was seeking in April, and that a due diligence process with the French state over the potential purchase of Atos's Advanced Computing, Mission-Critical Systems and Cybersecurity businesses is "progressing well."

TechMarketView chief analyst Georgina O'Toole notes the EPEI proposal offers a reduction in Atos's gross financial debt of €3.4 billion ($3.7 billion), equity totaling a potential €700 million ($759 million), and finance in the form of €1.2 billion ($1.3 billion) of working capital facilities.

"The other point to note from the Křetínský proposal is that he seems to have given far greater consideration to the future of the Digital/Eviden business," O'Toole said. "His key concern appears to be the ability of the Eviden business to transform at the pace - and with the appropriate investment - necessary to keep up with market changes associated with the GenAI revolution."

The Onepoint offer has changed in that new members have joined the consortium, including some of Atos's creditors. The proposal states that the restructuring is intended to provide a "sustainable capital structure allowing Atos to reinvest in its assets to regain profitability and market share," she added.

Whichever proposal the company chooses, Atos will hope the financial restructure finally allows it to turn the corner after a chaotic handful of years during which it has struggled to reorganize and deal with mounting debts.

"All stakeholders will be keen to get past this current period of immense and damaging uncertainty," O'Toole opined.

Megabuyte Principal Analyst James Preece said: "The key thing for Atos is to at least get a deal over the line within a reasonable time frame."

"The poorly executed plan to split the business in two, flaky strategic interests, and axed deal processes have all snowballed into a business in free fall with no prospect of a turnaround organically," he added, referring to the plan to hive off the Digital, Big Data and Security (BDS) business lines into a separately traded company called Eviden (originally Evidian), while the rest of the company was to fall under the Tech Foundations banner.

"We suspect Atos contracts are ripe for picking by other systems integrators and consortiums as the uncertainty bubbles," Preece concluded.

This doesn't seem to have stopped Atos winning new supercomputer contracts, however. Only last week it was selected by the University of Reims Champagne-Ardenne (URCA) to deliver an 8 petaFLOPS system based on its BullSequana XH3000 architecture and powered by Nvidia GH200 Grace Hopper Superchips. ®

https://www.theregister.com//2024/06/03/atos_rescue_packages/