Deutsche Post wants government to speed up privatisation
Deutsche Post has called on the German government to speed up the privatisation of the postal operator, arguing it would improve its ability to do business, particularly in the US.
Deutsche Post is currently embroiled in a bitter legal battle with its US competitors FedEx and United Parcel Service, who argue that Deutsche Post’s Miami-based carrier Astar Air Cargo violates US laws forbidding foreign control of domestic airlines. They also stress that Deutsche Post’s state ownership further strengthens their case.
“We would welcome if the government continued to bring Deutsche Post shares to the market that would help us qualitatively, particularly in the US,” Edgar Ernst, the chief financial officer, told the Financial Times. However, he said that at present the government was not preparing for a second tranche.
Following an initial public offering of Deutsche Post in 1999, the German government still holds 62 per cent of Deutsche Post’s shares, about 18 per cent of which is parked at Kreditanstalt fur Wiederaufbau, the state-owned development bank.
Hans Eichel, the cash-strapped German finance minister, has frequently hinted he was considering parking more shares at KfW, which puts money in his coffers.
Meanwhile Mr Ernst conceded it would be good for Deutsche Post if its shares climbed more toward its IPO price of €20.50 by the time of the second tranche.
Deutsche Post shares rose 0.4 per cent to €16.98.
Separately, Deutsche Post said it planned to issue a second bond with a volume of up to €1bn ($1.2bn) and a maturity of at least ten years in coming weeks. The bond will replace bank and high-yield debt Deutsche Telekom inherited through the acquisitions of Airborne and DHL, Mr Ernst said. As a result, it will ease the postal operator’s interest burden by about €20m annually, while keeping its net debt stable.
Mr Ernst said the step also “accommodated” rating agencies, who prefer to see debt bundled at the group level. Earlier this year, Standard & Poor’s downgraded Deutsche Post to A from A+ after accounting differently for pension liabilities.
