State bank to raise funds via Deutsche Telekom bond sale

8 Jul 2003

State-owned bank Kreditanstalt fur Wiederaufbau (KfW) has announced it is to dilute its 12.1% stake in Deutsche Telekom [NYSE: DT] through a convertible bond worth up to EUR5 billion. The bank said that the sale would raise EUR4.5 billion, equal to a 5.8% stake in the telco, with an option to increase the issue by a further EUR500 million. KfW’s 18.8% holding in national newspaper Deutsche Post may also be disposed of, with the proceeds from both to be used to fund the state budget deficit and pay for tax cuts. The bank said that it will be selling to institutional investors outside the US and that the final number of shares underlying the exchangeable bonds will be determined on the basis of Deutsche Telekom’s share price following today’s bookbuilding period.

Germany