European Giants Tap into Bank of England's Covid Loan Scheme

Strategic Insights -

The Bank of England has revealed the first week of 53 companies that borrowed £16.2 billion under its Covid Corporate Financing Facility, highlighting the widespread impact of the coronavirus crisis on various industries. British firms, such as Marks & Spencer, EASYJET, and Rolls-Royce, were among those that took advantage of the emergency scheme, while foreign firms, including German chemicals business BASF and Japanese carmakers Honda and Nissan, also sought help. The scheme provides cheap funding to businesses struggling to cope with the pandemic.

Key Takeaways:

  • 53 companies borrowed £16.2 billion under the Covid Corporate Financing Facility, with British firms accounting for a significant portion of the beneficiaries.
  • The list of blue-chip companies that used the scheme includes household names from various industries, such as aviation, retail, and industry.
  • Foreign firms, including BASF, Honda, and Nissan, took advantage of the loan scheme despite having headquarters in countries where similar support was offered.
  • The heaviest user of the scheme is German chemicals business BASF, which drew down £1 billion despite having only 850 UK staff.
  • Online fast-fashion firm Asos secured support after a plunge in consumer spending hit internet retailers, despite being able to stay open.
  • Campaigners have expressed concern over the Government and Bank of England's loan schemes, with Tottenham Hotspur FC being criticized for taking a £175 million lifeline to deal with a £200 million revenue hit from the pandemic.

Statistics:

  • £16.2 billion: The total amount borrowed by 53 companies under the Covid Corporate Financing Facility.
  • 53 companies: The number of firms that took advantage of the emergency loan scheme.
  • £1 billion: The amount borrowed by German chemicals business BASF, which has only 850 UK staff.
  • £175 million: The amount borrowed by Tottenham Hotspur FC to deal with a £200 million revenue hit from the pandemic.
  • 850: The number of UK staff employed by German chemicals business BASF, despite it being the heaviest user of the loan scheme.

Sources:

  • [The Guardian](https://www.theguardian.com/business/2020/jun/29/bank-of-england-names-firms-that-took-150bn-covid-loan)
  • [The Telegraph](https://www.telegraph.co.uk/business/2020/06/29/coronavirus-shocks-bank-england-names-companies-covid-loan/)