Adidas was approved for $3.3 billion in aid from the German government and banks. Adidas was approved for 3 billion euros ($3.3 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 euros 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 late Tuesday.
As part of the aid, the German sportswear maker 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. The banks include UniCredit Spa, Bank of America Corp., Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc, Mizuho Bank Ltd. and Standard Chartered Plc. Adidas said it will repay any money used, including interest and fees, as fast as possible.
Adidas moved up the release of first-quarter results to April 27, saying it’s still too early to provide a financial outlook for 2020. After only taking the hit from China into consideration, the company said on March 11 that the coronavirus would cut first-quarter profit by about $500 million. The shares are down 22% for the year. KfW launched a loan program on March 23 to help companies facing a liquidity shortage. About 2,500 businesses had applied for loans totaling 10.6 billion euros as of April 3.
Adidas AG is a multinational corporation, founded and headquartered in Herzogenaurach, Germany, that designs and manufactures shoes, clothing and accessories. It is the largest sportswear manufacturer in Europe, and the second largest in the world, after Nike.