For infrastructure expansion
Proceeds from Telekom shares to strengthen the railway
04.06.2024, 01:23
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Within a few hours, the federal government made a billion-dollar profit from the sale of Telekom shares. Now the Federal Ministry of Finance has announced that the proceeds will go to Deutsche Bahn AG. The development bank KfW speaks of a responsible privatization policy.
The German government raised 2.43 billion euros within a few hours by selling Telekom shares and wants to invest the money in restructuring the railway. “The federal government will use the net proceeds from the transaction to strengthen the equity of Deutsche Bahn AG and to expand the railway infrastructure in Germany in a forward-looking manner,” the Finance Ministry announced. No sum was specified.
On Monday, after the stock market closed, KfW announced the sale of 110 million shares in the DAX group Deutsche Telekom to institutional investors. “Due to the receptive stock market environment, the placement was successful,” explained the Ministry of Finance. The joint share in Deutsche Telekom AG held directly by KfW and the federal government has fallen to around 27.8 percent.
The federal government is thus continuing its responsible privatization policy, the ministry announced. “In view of the federal interest that remains unchanged, the federal government and KfW will remain jointly the central shareholder of Telekom AG and will maintain the level of participation required for this,” the development bank said in a statement. “KfW and the federal government remain the largest shareholders of Deutsche Telekom AG.” In the second quarter, KfW had already sold 22.4 million shares on the market. As of the end of 2023, the federal government and KfW still held a good 30 percent of Telekom.