Shares in Deutsche Telekom took a hammering this week plunging to a two-year low. Moody's Investors Service changed its ratings outlook to negative from stable.

The fall is particularly significant as under Telekom's deal to take over US cellphone operator VoiceStream Wireless, VoiceStream shareholders can demand a renegotiation if the value of Telekom stock averages less than €33 (£26) for seven days within the 15 trading days before closure of the deal.

The merger is awaiting full US regulatory approval. Moody's said this week it was changing its ratings for Telekom because of increased uncertainty about the group's ability to carry out a crucial asset disposal plan amid increased volatility on equity markets.

The plan is aimed at raising cash in order to reduce Telekom's debt by approximately €29 billion during 2001. The German group is laden with debt after buying UMTS next generation mobile phone licences in Germany, Britain and the Netherlands last year.