Adidas plans multibillion bond to replace state loan – Manager Magazine
BERLIN (Reuters) – German sportswear company Adidas ADSGn.DE plans a multibillion-euro bond so that she no longer needs the state-guaranteed loan she agreed to take out earlier this month to help her get through the coronavirus crisis, a reported Thursday Manager Magazine.
Adidas declined to comment.
Without citing its sources, the magazine said that Adidas first needed to get a credit score from a major rating agency. The magazine said the company has confirmed this fact.
Adidas agreed to take out a government guaranteed loan of 2.4 billion euros (2.10 billion pounds) on April 14 after being affected by the closure of stores due to the closure of coronaviruses around the world and by the postponement of the Olympic Games and the Euro football tournament.
The move raised eyebrows in Germany, especially as Adidas recorded windfall sales and profits before the crisis.
“Everyone should try as much as possible to fend for themselves before seeking help from taxpayers so as not to consume scarce resources to help the needy,” said Josef Ackermann, former managing director of Deutsche Bank.
Adidas, which releases its first quarter results next Monday, said it was unable to provide a full-year outlook after warning in March that it expected sales to drop by as much as 1 billion euros in greater China.
It closed stores in the United States and Canada on March 17 and in Europe on March 18. Germany started allowing some stores to reopen this week.
Adidas was forced to back down after being criticized for saying it would stop paying rent on closed stores around the world, promising to pay by April after all.
Like many retailers, he continued to sell online. Adidas plans to raise its online sales target to 4.5 billion euros from 4 billion, Manager Magazine also reported.
One of the conditions of the syndicated loan is that the company suspends the payment of dividends during the term of the government guaranteed loan.
The company took out a loan of 2.4 billion euros from the public development bank KfW, plus 600 million euros in loan commitments from a consortium including UniCredit, Bank of America, Citibank, Deutsche Bank, HSBC, Mizuho Bank and Standard Chartered Bank.
Reporting by Emma Thomasson and Edward Taylor; Editing by Emelia Sithole-Matarise