Adidas cleared for 3 billion euros in rescue loans

Business

FILE – In this file photo dated Wednesday, Dec. 25, 2019, New Orleans Pelicans forward Derrick Favors wears Christmas-themed Adidas Pro Model Superstars shoes in the first half of an NBA basketball game Wednesday, Dec. 25, 2019, in Denver, USA. Sports apparel and shoe company Adidas said Tuesday April 14, 2020, it has been approved by the German government for a 3 billion-euro ( US dollars 3.3 billion) emergency loan to help the company get through a period of lost business due to the COVID-19 coronavirus outbreak. (AP Photo/David Zalubowski, FILE)

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FRANKFURT, Germany (AP) — Sports apparel and shoe company Adidas says it has been approved by the German government for a 3 billion-euro ( $3.3 billion) emergency loan to help the company get through a period of lost business due to the virus outbreak.

The company based in Herzogenaurach, Germany, said Tuesday that it was suspending dividends, share buybacks and 2020 executive bonuses as a condition of getting the loan “to bridge this unprecedented situation.”

The yet to be concluded syndicated revolving loan comprises a commitment of 2.4 billion euros from the state-owned development bank KfW and 600 million euros in loan commitments at customary market conditions from a consortium of the company’s partner banks, including UniCredit, Bank of America, Citibank, Deutsche Bank, HSBC Mizuho Bank and Standard Chartered Bank. Adidas said it agrees to repay any unused portion of the money including interest and fees, as quickly as possible.

The company said in a statement that it would forgo short- and long-term bonuses for the year, equalling 65% of target annual compensation for top management. Long-term bonuses for the next level of management would also be forfeited.

“The further development of the coronavirus outbreak and its impact on the company’s business cannot be predicted at this point in time,” the company said. “As a result, adidas is still not able to provide an outlook for the full year 2020 that includes this impact.”

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