Atos Faces Challenges as Ratings Lowered
Shares of French IT company Atos fell on Monday following a downgrade by S&P Global Ratings. This is the third time in less than a year that the company's ratings have been lowered. The downgrade comes as S&P highlights potential challenges or delays in addressing Atos's liquidity shortage.
As of 0910 GMT, Atos shares were trading 1.3% lower at EUR2.45. The stock has experienced a decline of approximately 65% since the beginning of the year.
In its latest action, S&P slashed Atos's long-term issuer credit rating as well as its issue rating on senior unsecured bonds. The ratings agency, citing extended refinancing negotiations with banks, warned of the risks associated with failure to reach an agreement.
S&P stated that if no agreement is reached, Atos may face the possibility of debt restructuring within the next 12 months, which could be seen as a distressed exchange and tantamount to default. The agency had previously downgraded the group on January 19.
Atos currently carries a debt pile of 2.32 billion euros ($2.50 billion) as of June 2023. The company is in discussions for the sale of its Tech Foundations business to an investment company led by Czech billionaire Daniel Kretinsky for EUR2 billion. Furthermore, talks with Airbus are underway for the sale of Atos's cybersecurity unit for up to EUR1.8 billion.
Last month, Atos appointed Paul Saleh as its new chief executive, marking yet another leadership change following a period of instability. The company experienced the departure of two chief executives in 2021 and 2022 due to a failed takeover attempt and multiple profit warnings, which negatively affected investor confidence.
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