Atalian - comment

The restructuring process has started. Atalian is working with a noteholder group representing more than 50% of the 2028 notes. With the initial bids for the business showing a “material discount” to par on the debt, a debt equity swap will be on the table this time. The previous restructuring left the Julien family in control, but this seems unlikely this time around. The French business is struggling, losing contracts, and unable to pass on inflationary costs (mainly wages. We had forecast recovering margins, but the reverse has been true. We would expect that noteholders will be better served by taking control and stabilising the business before selling it, rather than hitting a distressed bid, but this requires confidence in the new turnaround plan. The timing of the restructuring has not yet been determined, but it will need to be swift to prevent further drift in the business. The noteholder group is backstopping a one-year €50m Super Senior facility to provide liquidity. Atalian finished the year with €155m in cash, but this required €30m in cash deferrals, which we expect relates largely to payables being stretched. Atalian also drew further on its factoring lines. We had forecast that year-end cash would be €125m, but clearly the normalised figure is likely to be under €100m. As we anticipated in our last mail, the March coupon is unlikely to be paid. Atalian has launched a consent solicitation to allow for an increase in the Credit Facilities basket to accommodate the Super Senior facility; this will require 90% approval, but given the alternative, we expect noteholders to agree. Continued access to its factoring lines is crucial for Atalian, so ensuring the confidence of the factoring banks will be important. We expect the €50m is sized to reduce pressure on factoring and working capital.

https://atalian.com/wp-content/uploads/2026/02/2026-02-02-PR-Release-re-Second-CS.pdf

https://atalian.com/wp-content/uploads/2026/01/2026.01.30-ATALIAN-CORPORATE-ANNOUNCEMENT-VF-1.pdf