Tech company Atos: needs more cash and gets French state offer for key units

(Fixes operating period in paragraph 9)

PARIS (Reuters) -Ailing French IT firm Atos said it needed 1.1 billion euros ($1.18 billion) to stay afloat over the near term – almost doubling an earlier estimate – while it also put a price tag to the French state’s offer to take over some of its key units.

The French government, over the weekend, sent a letter of intent to the struggling company, offering to acquire assets deemed to have strategic importance including Atos’s Advanced Computing, Mission-Critical Systems and Cyber Products.

The bid, aimed at buying 100% of those units, was based on an indicative enterprise value of between 700 million and 1 billion euros, Atos said on Monday.

Atos secures communications for the French military and secret services and manufactures servers to make supercomputers capable of processing vast amounts of data for research or to develop the nascent artificial intelligence industry.

The French government has not yet said how it would handle these units, which employ about 4,000 people and generate about 900 million euros ($962 million) of annual sales.

There has been speculation in the French media that defence groups such as Thales and Dassault Aviation could take part in a plan to safeguard the key Atos assets.

Thales and Atos declined to comment, while Dassault Aviation was not immediately available for comment.

KEY PARTNER FOR PARIS OLYMPICS

Atos, which manages data and cybersecurity for the upcoming Olympic Games, is in the midst of a refinancing, which will result in significant dilution for existing shareholders.

Atos also said it needed 1.1 billion euros in cash to fund its operation over the 2024-2025 period, compared to a 600 million euro estimate given in April.

The funds are supposed to be provided in the form of debt and equity by existing or new investors who have until May 3 to make their proposals, added Atos, in view of striking a restructuring deal in July.

The company, whose shares 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, had flagged it would need to raise its cash needs in its last earnings report.

Atos also said it was now targeting a ‘BB’ credit profile by 2026, which would imply a gross debt reduction of 3.2 billion euros, compared with a target of 2.4 billion euros previously.

($1 = 0.9324 euros)

(Reporting by Tassilo Hummel; Editing by Inti Landauro)