Atos - comment

Our initial thoughts on the Atos presentation this morning are that operational projections are very ambitious and difficult to justify.  Therefore, the level of debt reduction, in whatever format it ultimately arrives, is too conservative.  We would expect some of the creditor/shareholder proposals to be more aggressive on debt reduction, and as always in these cases, the providers of fresh cash (either in equity or debt form) to take the majority of the equity.  

Atos are seeking €1.8-€2.4bn of debt reduction (37c to 49c) with the balance extended for 5yrs.  However, with additional liquidity required, €600m minimum plus €600m of additional liquidity via RCF/bank guarantees, we would expect further debt reduction will ultimately be required.  We are going through the plan in detail and will update our analysis later.