Germany Sells Post, Telekom Stakes

The German government is continuing to sell off the family silver in an attempt to plug the holes in its public finances and is placing further shares in Deutsche Telekom and Deutsche Post with the state-owned KfW bank, KfW said on Monday. KfW, which the government traditionally uses as a privatization vehicle, said that Berlin was selling stakes of 7.3 percent a piece in the telecommunications giant and the postal authority. The government was placing a total 80.9 million Deutsche Post shares and a 307.8 million Deutsche Telekom shares with the KfW in two transactions worth a combined five billion euros ($6 billion), the bank continued in a statement. When privatizing state-owned companies, Berlin traditionally places shares with KfW, which in turn sells them via the open market at a later date when conditions are more propitious. Following the transaction, the government no longer holds any shares in Deutsche Post directly. And its direct shareholding in Deutsche Telekom now stands at around 15.7 percent. KfW now holds a stake of 44.7 percent in Deutsche Post and 22.1 percent in Deutsche Telekom. The proceeds from sale are to be used to fill the gaps in the 2005 federal budget, KfW added.