Atos ditches share sale for bank talks, shares plunge
Rights issue, standby underwriting commitment shelved
Will seek third party to facilitate talks with banks
Shares down 27%
Adds shares reaction, comments
By Stephanie Hamel and Dominique Vidalon
Feb 5 (Reuters) -Shares in French technology company Atos ATOS.PA plunged 27% on Monday after it dropped plans for a rights issue citing "changes in the market environment" and said it had started talks with its banks about refinancing its debt.
Atos, which last month named its fourth new chief executive in less than two years and has grappled with a series of profit warnings, said it would request the appointment of an independent third party to facilitate talks with banks.
A standby underwriting commitment by BNP Paribas and JPMorgan for a 720 million euro ($776 million) rights issue was no longer in effect, Atos said.
"Atos will inform the market in due course of the progress of 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 added.
By 0857 GMT, Atos shares were down 27%, taking their slide this year to more than 50%.
The IT service provider in November said it was considering accessing capital markets and the sale of additional assets to tackle the capital raising plan, a 1.5 billion euro term loan maturing in January 2025, and 750 million euros in bonds maturing May 2025.
Talks to sell Tech Foundations, Atos's loss-making IT consulting arm, to Czech businessman Daniel Kretinsky's EPEI group are ongoing, with "no certainty that these negotiations will result in an agreement", Atos said.
The group, in January warned that its free cash flow would be slightly below its initial target for the second half of 2023.
($1 = 0.9276 euros)
Reporting by Stéphanie Hamel in Gdansk; additional reporting by Dominique Vidalon;
editing by Milla Nissi and Jason Neely
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