(Bloomberg) -- A majority of creditors of Atos SE have signed the lock-up agreement that will see them take control of the embattled French IT services provider following its restructuring, according to a statement on Monday.
The company has also secured €1.68 billion ($1.8 billion) of new financing from existing creditors, in the upper range of what was announced on June 30. As part of the plan, bondholders and lenders have agreed to convert €2.9 billion of loans and bonds into equity and to inject €233 million in new equity, either themselves or alongside a private industrial investor.
Creditors that haven’t signed yet the agreement have until July 22 to do so. That week, Atos aims to ask a commercial court to open an accelerated safeguard proceeding, a French restructuring process to get the plan approved by a court. The move would allow the company to cram down dissenting creditors if needed to implement the restructuring plan.
The agreement is a major milestone in a long-running saga to save the sprawling IT company that’s a key supplier to both the French nuclear industry and the Olympic Games. Once one of France’s premier tech companies, Atos has struggled with huge debts, accounting errors and industry-wide headwinds that have wiped out nearly €12 billion of its market value over the past seven years. The company has been under a formal restructuring process with creditors and banks since February to avoid bankruptcy.
Proceeds from the potential disposals of its nuclear energy subsidiary Worldgrid and its data and security unit BDS will be used to repay the debt if the forecast cash balance of the company at the end of 2026 is at least €1.1 billion. Otherwise, Atos will be allowed to keep part of those proceeds to maintain its cash position.
Asked about its dialogue with clients during the negotiations of the restructuring in a call with journalists, Atos chief executive officer Paul Saleh said the company is in touch with its customers and has reassured them that its refinancing is already settled. Regarding the Olympic Games, Saleh said the company is ready and will make sure this Olympic Games will be “as successful” as the others in which it has participated.
Here are some of the key elements of the deal:
(Updates with context in fourth paragraph)
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