Grant Thornton raises uncertainty over Atos UK’s future
LONDON, UNITED KINGDOM — The UK arm of Atos, a major IT services provider, is facing significant financial challenges that could jeopardize its ability to continue as a going concern.
This revelation comes from the company’s latest annual report, filed on June 24, 2024, for the year ending December 31, 2022.
Auditor raises red flags amid ongoing restructuring efforts
Grant Thornton, Atos UK’s auditor, highlighted a “material uncertainty” regarding the company’s future. The report cites ongoing discussions about refinancing Atos’s debt and restructuring the business, as well as potential asset sales, including its big data and security unit to the French state.
The auditor stated, “As a result of the circumstances described above regarding the ability of the group to support the company’s access to liquidity, there is a material uncertainty related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern.”
Atos’s €2 billion debt challenge
Atos faces a daunting €2 billion (US$2.14 billion) debt maturity in 2024. The company’s interim financing includes a €100 million (US$106.97 million) revolving credit facility, a €300 million (US$320.92 million) factoring facility, and a €50 million (US$53.49 million) loan from the French state. However, these measures may not be sufficient to address long-term financial needs.
Complicating matters further, restructuring talks have hit a roadblock after the OnePoint consortium, Atos’s largest shareholder, unexpectedly withdrew from negotiations.
UK government contracts at risk
Atos’s financial instability could have far-reaching consequences for UK public services. The company has secured £2.4 billion (US$3 billion) in government contracts since December 2019, with £942 million (US$1.18 billion) currently active.
These contracts span critical areas such as the Student Loans Company, Department for Work and Pensions, Home Office, and HM Revenue and Customs (HMRC).
In light of these developments, the UK government is reportedly preparing contingency plans.
A Cabinet Office spokesperson stated, “We undertake regular reviews of suppliers and on occasion will undertake further due diligence to ensure public services can be maintained in a variety of scenarios.”
Restructuring hurdles
As Atos struggles to navigate its financial challenges, the potential sale of its big data and security division to the French state for €700 million (US$749 million) could provide some relief.
However, finding buyers for its legacy operations remains a significant hurdle, underlining the gravity of the company’s current situation.
