Adidas to Replace €2.4 Billion Loan From German State Bank With a Multi-Billion Bond

BERLIN, Germany — German sportswear firm Adidas plans a multi-billion euro bond so that it no longer needs the state-backed loan it agreed to take earlier this month to help it get through the coronavirus crisis, Manager Magazine reported on Thursday.

Adidas declined to comment.

Without citing its sources, the magazine said Adidas first had to get a credit rating from a large ratings agency. The magazine said the company had confirmed that fact.

Adidas agreed to take a €2.4 billion (£2.10 billion) government-backed loan on April 14 after it was hit by the closure of stores due to global coronavirus lockdowns and by the postponement of the Olympic Games and Euro soccer tournament.

That move raised some eyebrows in Germany, especially as Adidas recorded bumper sales and profits before the crisis.

“Everyone should try as hard as one possibly can to get by on its own before asking for taxpayers’ help in order not to consume scarce resources to help the needy,” said Josef Ackermann, former Deutsche Bank chief executive.

Adidas, which reports first-quarter results next Monday, has said it is unable to provide an outlook for the full year after warning in March that it expected sales to drop by up to €1 billion in greater China.

It closed its stores in the United States and Canada on March 17 and in Europe on March 18. Germany has started to allow some stores to reopen this week.

Adidas was forced to backtrack after drawing criticism for saying it would stop paying rent for closed stores around the world, promising to pay up for April after all.

Like many retailers, it has continued to sell online. Adidas plans to lift its target for online sales to €4.5 billion from €4 billion, Manager Magazine also reported.

One of the conditions of the syndicated loan is that the company suspends dividend payments for the duration of the state-backed loan.

The company took a €2.4 billion loan from the KfW state development bank, plus €600 million in loan commitments from a consortium including UniCredit, Bank of America, Citibank, Deutsche Bank, HSBC, Mizuho Bank and Standard Chartered Bank.

By Emma Thomasson and Edward Taylor; editor: Emelia Sithole-Matarise