Germany sold €5 billion worth of shares in Deutsche Post and Deutsche Telekom to state bank KfW Bankengruppe yesterday to help plug a gaping budget hole.
The government is ending generations of state control of the country's post office by selling its entire remaining stake in Deutsche Post, along with 7.3 per cent in phone-carrier Deutsche Telekom.
Berlin has so far raised €9.5 billion in privatisation and one-off revenues this year. It hopes to reach a total of €17 billion to limit new borrowing.
"You can assume that we made a big step towards our goal for this year," said a spokesman for the German finance ministry.
Germany still owns around 16 per cent in Deutsche Telekom now, which it plans to sell by the end of next year.
Finance minister Hans Eichel said last week that the government, if re-elected after an expected September general election, would aim to cut 2006 new borrowing to €21.5 billion with the help of record privatisations and one-off revenues of more than €30 billion.
State-owned KfW acts as a staging post for the government to ultimately sell such shareholdings - it holds onto the stock until it can get the best price.
"We listen to the market, every day and every minute. When the market is in the right mood, we will sell," KfW chief executive Hans Reich said last week.
The bank last sold €4.4 billion worth of Telekom shares in October and €2.4 billion worth of Deutsche Post shares last month. It now holds 44.7 per cent of Post shares and 22.1 per cent of Telekom.
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