Sportswear giant Adidas secures €3bn to battle Covid crisis

German group must forgo dividends for duration of backstop financing

Adidas was approved for €3 billion in aid from the German government and banks as it grapples with the fallout from the coronavirus crisis. Photograph:  Sean Gallup/Getty Images

Adidas was approved for €3 billion in aid from the German government and banks as it grapples with the fallout from the coronavirus crisis. Photograph: Sean Gallup/Getty Images

 

Adidas was approved for €3 billion in aid from the German government and banks, and the company will cease dividend payments, as it grapples with the fallout from the coronavirus crisis.

The financing package comes in the form of a syndicated revolving loan facility, with €2.4 billion in loan commitments coming from German state-owned bank KfW and an additional €600 million euros from a consortium of Adidas’s partner banks, it said in a statement.

As part of the aid, Adidas said it’s required to stop payouts for the duration of the facility. The company already decided to stop share buybacks while managers forgo some compensation.

Adidas said it’s still too early to provide a financial outlook for 2020, and it moved up the release of first-quarter results to April 27th. After only taking the hit from China into consideration, the company said on March 11th that the coronavirus would cut first-quarter profit by about $500 million.

KfW launched a loan program on March 23rd to help companies facing a liquidity shortage. About 2,500 businesses had applied for loans totaling €10.6 billion as of April 3rd. – Bloomberg