Puma has secured more than 600 million euros in fresh financing as it continues a transformation effort.
On Thursday, the German athletic firm said it obtained a bridge loan of 500 million euros and additional confirmed credit lines of 108 million euros.
Puma noted that both facilities are designed to provide interim liquidity to refinance utilizations of the existing revolving credit facility worth 1.2 billion euros, therefore increasing overall flexibility.
The company added that the new 500 million euros bridge loan was underwritten by Santander Corporate & Investment Banking. Both the bridge loan and the additional confirmed credit lines have a maturity of up to 2 years, Puma said.
“Even though our existing revolving credit line and the promissory notes are staying continuously available, today’s announcement will add more financial flexibility as we are working to finalize our long-term funding structure,” Markus Neubrand, chief financial officer of Puma SE, said in a statement on Thursday. “The fact that bank partners have further increased their exposure and business, underscores the confidence in our future business model and strategic direction. This will allow us to execute on our strategic priorities and our ambition to establish Puma as a top three sports brand globally.”
The news comes as Puma faces a tough road ahead to turn around its business. In October, Puma logged a third-quarter sales drop of 10.4 percent as its new chief executive officer Arthur Hoeld also outlined his plans for the strategic reset.
Organic sales at Puma fell 10.4 percent in the third quarter to 1.96 billion euros. Earnings before income tax, or EBIT, also collapsed, with both adjusted and reported EBIT falling by more than 80 percent.
The German activewear firm cited a strategic “reset” as it navigates “several company-specific challenges, including muted brand momentum, elevated inventory levels across the trade and low quality of distribution.”
For months, sale speculation has been swirling around the brand.
Shares of Puma SE ticked up in September over speculation that its rival Adidas might be interested in acquiring the brand. Two days later, shares of Puma rose again over speculation that brand management firm Authentic Brands Group and private equity firm CVC would be throwing their hats into the ring.
In November, Puma shares popped up again, this time on rumblings that China’s sportswear firm Anta Sports could be eyeing the German athletic brand. In addition to media outlets citing Anta, Li Ning and Asics were also mentioned as possible bidders. Both Li Ning and Asics reportedly denied that any talks or even evaluations of potential interest were taking place.
The company’s shares were down 3 percent in Friday trading, thanks in part to Nike’s sluggish outlook, which is impacting the athletic sector as a whole.