German government to sell further 7.3 pct in both Deutsche Post, Telekom

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, a KfW spokesman said Monday.

The spokesman confirmed a newspaper report which said that Berlin was placing stakes of 7.3 percent apiece in the telecommunications giant and the postal authority with the KfW, which the government traditionally uses as a privatisation vehicle.

The combined value of the two transactions amounted to just under five billion euros (six billion dollars), the spokesman said.

When privatising 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.

The proceeds from sale are to be used to fill the gaps in the federal budget.