Adidas Credit Agreement
Posted on November 27, 2020
Adidas added that in Germany it had reached an agreement with local business committees to reduce the working time of several employees. www.barrons.com/news/adidas-eyes-2-4-bln-state-guaranteed-coronavirus-loan-01586886305 “The obtaining of solid investment degree ratings, the issuance of bonds worth 1.5 billion euros on favourable terms and the guarantee of a new syndicated loan of 1.5 billion euros by our partner banks have significantly strengthened Adidas` financial profile,” said Harm Ohlmeyer, Chief Financial Officer of Adidas. The federal government has promised “unlimited” loans to help businesses cope with the coronavirus storm. Adidas AG announced that its 3 billion euro loan application was approved on April 14, giving it an additional cash cushion during the coronavirus pandemic. The company said it was unable to provide a financial outlook for fiscal year 2020 due to the effects of the coronavirus outbreak, which “cannot be predicted at this stage.” “One of the conditions… Adidas is de facto suspending dividends for the duration of the facility,” the company said, adding that it would “repay as soon as possible any part of the used loan, including interest and fees.” According to its own data, Adidas has already repaid 500 million euros from a facility of the German state development bank KfW, for which Adidas obtained the approval of the federal government earlier this year. Adidas has decided to postpone the release of the first quarter 2020 results until 27 April. The stock has plummeted, but the bank says the vaccine will be confirmed when the full results of the study are published. This copy is only for your personal, non-commercial use. The dissemination and use of this material is subject to our subscription agreement and copyright. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or www.djreprints.com. In the same press release, Adidas said it has closed its network of branches in Europe, North America, Latin America, emerging markets, Russia and the Commonwealth of Independent States, as well as much of the Asia-Pacific region over the past four weeks due to the rapid spread of coronavirus.
Adidas explained that the wholesale and retail activities in these markets account for 60% of the group`s activity. “Today, the company obtained the federal government`s approval for the participation of the state-owned development bank KfW in a syndicated revolving credit facility… To overcome this unprecedented situation,” Adidas said in a statement. The German sporting goods group said the new syndicated loan with 12 banks would be ready until 2025. Adidas, which made a net profit of nearly two billion euros ($2.2 billion) in 2019, has been hit hard by a drop in sales and closures of Chinese branches worldwide. Under the terms of the syndicated loan, Adidas must suspend its dividends for the duration of the facility. The dividend freeze follows Adidas` latest step to abandon its share buyback program and forego its short- and long-term bonuses for 2020. German sporting goods maker Adidas said on Tuesday it had secured approval for a 3 billion euro ($3.3 billion) loan funded largely by the German government to help it overcome the effects of the coronavirus crisis. The syndicated loan would include 2.4 billion euros from German state lender KfW and an additional 600 million euros would come from partner banks Adidas HSBC, UniCredit and Deutsche Bank, the company said. This copy is only for your personal, non-commercial use. To order submission-ready copies for distribution to colleagues, customers or customers, visit www.djreprints.com.
But adidas has recently been accused of abusing coronavirus measures to help small businesses. Copyright ©2020 Dow Jones – Company, Inc. Any rights reserved “[A]ccess on additional liquidity is the key to overcoming this crisis. We will repay every part of the loan, including the interests