Adidas receives approval for €3 billion loan
17/04/2020
Conditions of the loan include suspending dividend payments. Adidas pointed out that its executive board recently “took the decision to stop the repurchasing of adidas shares as well as to forgo its short- and long-term bonus for the year 2020, which accounts for a total of 65% of the target annual compensation”. The long-term bonus component for the next leadership levels within the company, adidas said, will also be forfeited for the current year.
The syndicated loan, which is not yet concluded, is a financing instrument providing borrowers access to funding at larger scale as well as flexibility in terms of drawdowns and repayments, adidas said. It comprises a loan commitment of €2.4 billion from KfW (Germany’s state-owned development bank) and €600 million in loan commitments from a consortium of the company’s partner banks.
“The current situation poses a serious challenge even for healthy companies. We thank the German government for its fast and comprehensive course of action in response to this unprecedented global crisis,” said adidas CEO Kasper Rorsted. “We are doing our utmost to protect the long-term well-being of adidas, our 60,000 employees and our partners, and are implementing numerous measures. These measures include the establishment of strict cost and working capital controls, the reduction of management compensation, the stop of the share buyback program as well as the suspension of dividend payments. But on top of this, access to additional liquidity is key to weather this crisis. We will repay any used portion of the loan, including interest and fees, as quickly as possible.”
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