Deutsche Post to redeem exchangeable bonds into Postbank shares before maturity

Deutsche Post AG said it is redeeming the three-year exchangeable bonds it issued in 2004, by allowing bondholders to exchange them for Deutsche Postbank AG shares one year before the issue matures in July 2007.

In a statement, the post office group said bondholders can exercise their right to exchange the bonds for Postbank shares from July 3-23 this year.

Once all the bonds are exchanged for Postbank shares, the banking unit’s free float will increase to 49.9 pct from the present 33.3 pct, while Deutsche Post’s stake in the unit will be reduced to about 50.1 pct.

By calling the exchangeable bond before maturity, Deutsche Post will be able to cut its net financial debt by around 1 bln eur this year.

It said it decided to call in the bond prematurely because of Postbank’s positive share price performance.