Atos says it will need more cash than expected

Logo of French IT consulting firm Atos in Nantes

By Diana Mandia

(Reuters) -Struggling French IT consulting firm Atos on Thursday said a review of its 2024-2027 business plan would lead to an increased need for cash and potentially additional debt reduction, forcing it to update in the coming days the parameters of its refinancing plan presented in early April.

Atos also said it would extend the deadline for refinancing proposals from existing stakeholders and third-party investors to May 3 from original April 26.

"We will review those proposals with our financial creditors and agree on an appropriate path forward. Our goal remains to agree on a refinancing solution by this coming July," Chief Executive Officer Paul Saleh said in a statement.

The technology company, which manages data and cybersecurity for France's nuclear industry and the upcoming Olympic Games, is in the midst of a refinancing, which includes raising 1.2 billion euros ($1.29 billion) via equity and new loans and will result in significant dilution for existing shareholders.

Shares in Atos, whose net debt stood at 3.9 billion euros at the end of March, have plummeted over the past two years after a string of profit warnings, a revolving-door of CEOs and the collapse of potential asset sales, notably its BDS cybersecurity unit and its legacy operation Tech Foundations.

Its shares, which lost around 71% so far this year, fell 8% at the market open.

Atos said earlier this month it needed to raise 600 million euros via debt and equity to carry its business through 2024 and 2025. The company said it also planned to raise 300 million euros in new revolving credit lines and 300 million euros in new bank guarantees.

The review of the group's 2024-2027 business plan is based on current market conditions and business performance for the first quarter of the year, Atos said.

Atos reiterated its intention to reach an agreement on the company's new capital structure by July.

Atos on Thursday also reported orders of 1.6 billion euros at the end of March, for a book-to-bill ratio of 64%, compared with 73% in the prior year, reflecting delays in contract awards as clients await the resolution of the group's refinancing plan.

"We were expecting some turnaround and we're not seeing that and that softness has seemed to be persisting," Saleh told analysts.

($1 = 0.9335 euros)

(Reporting by Diana Mandiá; Editing by Mrigank Dhaniwala, Stephen Coates and Tomasz Janowski)