In the Corona crisis, even global corporations and industry leaders do not get normal credit. The state-owned KfW (formerly: Kreditanstalt für Wiederaufbau) is the savior in times of need. Thanks to the Corona aid, their funding volume more than doubled in the first half of 2020. It rose from 33.6 to 76.2 billion euros. According to the banking group, funding within Germany has even tripled.
KfW’s corona aid in Germany for the first half of 2020 in figures:
- about 70,000 loan applications
- 33.6 billion euros in commitments
- around 97 percent of the applications came from small and medium-sized companies
- 99.8 percent of them received loans of up to EUR 3 million
KfW also supports large corporations with loans of over 1 billion euros. These big companies have applied for KfW loans.
@imago images / Aviation-Stock
At Tui everything happened very quickly. “KfW and Tui AG have signed the contract for a bridging loan of 1.8 billion euros,” the travel company announced on April 8, 2020. The KfW loan was intended to “cushion” the effects of the Covid 19 pandemic until the end of the travel restrictions. The group emphasized: “Tui is a very healthy company.” In mid-August, an additional stabilization package worth 1.2 billion euros was announced. It consisted of an expansion of the existing KfW loan by EUR 1.05 billion and a convertible bond of EUR 150 million. The group also wants to push ahead with the realignment towards a “digital platform company”.
@imago images / Rupert Oberhäuser
Not every KfW loan applied for is approved or used. In April the media reported: “Thyssenkrupp receives a billion-euro loan from KfW”. A spokesman for the steel and industrial group just wanted to confirm that state funding is being examined. In the balance sheet for the first nine months of the current fiscal year, the company announced in August that the sale of the elevator business had significantly improved the group’s balance sheet metrics. “In the course of the corona pandemic, Thyssenkrupp had taken out a credit line of one billion euros from the KfW special program at the beginning of May to secure liquidity until the Elevator transaction was completed. The credit line did not have to be used and ended with the completion of the Elevator transaction. “
@imago images / Sven Simon
How hard the corona crisis apparently hit Adidas became clear early on. The sporting goods manufacturer got into a lot of trouble with the plan to stop shop rentals and was forced to issue a public apology on April 1. A few days later, Adidas reported: “The company today received approval from the German government to allow the state-owned development bank KfW to participate in a revolving syndicated loan of EUR 3.0 billion under normal market conditions to bridge this exceptional situation.” The loan includes a loan commitment in the amount of 2.4 billion euros from KfW and loan commitments of 600 million euros from a consortium of partner banks of the company. “The consortium consists of UniCredit, Bank of America, Citibank, Deutsche Bank, HSBC, Mizuho Bank and Standard Chartered Bank,” announced Adidas.
@imago images / Nordphoto
Bundesliga soccer clubs also need state support. Officially, however, they don’t like to comment on it. On the other hand, the club boss of Werder Bremen, Klaus Filbry, deals aggressively with the lack of money. He told the Werder news portal “Deichstube” in August: “We are simply missing an incredible amount of money as a result of the Corona crisis – around 30 million euros in income from the past and the coming season. These are above all lower TV income as well as sponsorship income and of course the lack of audience income. ”This is why the KfW loan was applied for. If this is approved, the season is “completely financed”. According to Filbry, 16 clubs from the first and second division have made such an application. This includes VfB Stuttgart. Club president Claus Vogt defended himself against criticism that on the one hand wages in the millions are paid to players and on the other hand government loans are being used. Vogt showed understanding for this view in the SWR. But the association also has 220 “normal” employees for whom business operations must be maintained.
@imago images / Stefan M Prager
Sixt also had to fall back on a loan from KfW. “As a result of the extraordinary circumstances caused by the Covid-19 pandemic, financing via the capital market is currently not possible even for highly capitalized companies without a rating such as Sixt SE,” the car rental company announced in May 2020. He had reported the strongest financial year in the company’s history for 2019. The syndicated loan agreement with a revolving credit line of up to 1.5 billion euros was accordingly concluded with a banking consortium (including Bayerische Landesbank and Commerzbank) with the participation of KfW. “It is important to me to emphasize that this is a loan with interest rates customary in the market, which is to be repaid in full, and not a subsidy free of charge,” said CEO Erich Sixt.
@imago images / fossiphoto
In addition to Adidas, Puma also needed financial support from the state. “In May 2020, Puma secured a new credit line of 900 million euros through a syndicate of twelve banks, including a direct investment by the Kreditanstalt für Wiederaufbau (KfW) in the amount of 625 million euros,” the group announced. According to the company, sales fell in the second quarter by almost a third to EUR 831 million. The operating result in the first half of 2019 was EUR 223 million. It slipped to minus 59 million euros in 2020.
Koenig & Bauer
Even centuries-old traditional companies are not safe from the Corona crisis. Koenig & Bauer was founded in 1817 and claims to be the world’s oldest printing machine manufacturer. In July 2020, Bayerischer Rundfunk reported that the Würzburg company had applied for a corona aid loan of up to EUR 120 million from KfW.