Germany sells shares in postal company for $2.3 billion to help finance railway improvements

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This article was published 07/02/2024 (961 days ago), so information in it may no longer be current.

BERLIN (AP) — Germany’s state-owned development bank has sold shares in the company that owns the national postal service for about 2.17 billion euros ($2.3 billion), reducing the government’s stake and raising money to help finance improvements to the country’s rail network.

The KfW bank, which holds the government’s remaining stakes in previously state-held companies, said late Tuesday that it had sold 50 million shares of Deutsche Post — the name under which it still trades on the stock exchange, although the company is now known as DHL Group — at 43.45 euros each. That amounts to 4% of the company’s shares.

The sale cuts the state’s stake in DHL to 16.5%, though it is still the largest single shareholder. The proceeds are to be used to strengthen the capital of Germany’s main railway operator, the state-owned Deutsche Bahn, to help it upgrade railway infrastructure, the Finance Ministry said Wednesday.

The government is turning to privatization proceeds to help finance improvements to the rail network after a court ruling forced it to plug a big hole in this year’s budget and reconsider its wider financial plans.

In November, Germany’s highest court annulled a decision made by the government in 2022 to repurpose 60 billion euros originally meant to cushion the fallout from the COVID-19 pandemic for measures to help combat climate change and modernize the country. The maneuver ran afoul of Germany’s strict self-imposed limits on running up debt.