German sportswear giant adidas has announced the approval of €3 billion (or US $ 3.3 billion) as aid from German government and banks as the company grapples with the falling business during lockdowns worldwide.
The aid will be in the form of a syndicated revolving credit line with €2.4 billion being contributed by German state-owned bank KfW and the rest €600 million coming from a consortium of the company’s partner banks including Bank of America, Citibank, Deutsche Bank, HSBC, UniCredit, Standard Chartered Bank and Mizuho Bank, as per a statement by the company.
They will be unable to pay out dividends for the duration of the loan as per a condition laid out as part of the syndicated loan.
adidas has added that it will not be able to provide an outlook for 2020 due to the current financial circumstances and the executive board has agreed to stop the repurchase of shares and to forgo its short-term and long-term bonuses.
The company’s shares are down 22 per cent and the first quarter results’ announcement has been shifted to 27 April after revealing that taking the hit on business from China into consideration, the first quarter profit could take a US $ 500 million dive.
