German sports giant Adidas has been granted a three billion euro loan from the German government, in order to enable it to survive the impact of the coronavirus. In return, however, the company will temporarily not be allowed to pay dividends.
No Olympic Games
Adidas has been granted a three billion euro syndicated loan from KfW, the German state development bank, to help it cope with the financial consequences of the Covid-19 pandemic. It follows the example of the holding company of MediaMarkt and Saturn, which also was able to secure emergency state funding.?
The sports brand is suffering from the compulsory closure of many stores, the reduction in sporting activity since the closure of sports clubs and the postponement or cancellation of major sporting events, including the Olympic Games in particular.
The German public bank is providing 2.4?billion euros, while a consortium of private banks such as Deutsche Bank, HSBC and Bank of America will be adding the remaining 600?million euros. One of the conditions of this agreement is that the company will not pay dividends to shareholders as long as the loan is outstanding.
The board of directors has also stopped buying back its own shares and is abandoning the short- and long-term bonuses planned for?2020. Adidas does not yet dare to make any forecasts for the rest of the year.