ADIDAS RECEIVES €3 BILLION EUR GOVERNMENT LOAN TO OFFSET COVID-19 LOSSES
adidas‘ loan-seeking motion has been approved by a variety of banking institutions, primarily Germany’s state-owned development bank KfW. As Reuters divulged, the loan totals €3 billion EUR, approximately $3.3 billion USD.
With a vast majority of its retail outposts temporarily shuttered, adidas is taking a considerable profits hit, fueling its desire to mitigate the financial impact of the coronavirus by means of a government-approved loan.
“Today, the company received the approval of the German government for the participation of KfW, Germany’s state-owned development bank, in a syndicated revolving loan facility amounting to 3.0 billion euros,” adidas said in a statement.
KfW committed €2.4 billion EUR to the loan while the additional €600 million EUR was provided by a collective of lenders that includes Bank of America, Citibank, Deutsche Bank, HSBC, and UniCredit. The loan comes with various stipulations; for instance, adidas must suspend dividend payments to shareholders during the loan’s duration. adidas also confirmed that executives will no longer repurchase the company’s shares and plan to forgo short- and long-term bonuses in 2020.
Finally, adidas stated that it isn’t able to provide a financial outlook for 2020, but it will publicize first-quarter results on April 27.
As adidas navigates the complexities of a global pandemic, it aims to create and deliver 3D-printed face shields to medical professionals.
