Exclusive Exclusive: Government Puts Brake on Deutsche Bahn Privatization Plans
The federal government is putting the brakes on German railways operator Deutsche Bahn’s plans to partially privatize two of its subsidiaries, Handelsblatt has learned. The head of Deutsche Bahn, Rüdiger Grube, wants to float Arriva, which handles passenger services outside of Germany, and freight transport firm Schenker in order to slow down the rise of DB’s debt. The state-owned railroad company is currently in the red with €17 billion ($18.45 billion), a number projected to rise further in the wake of Mr. Grube’s ongoing restructuring and growth program. The IPOs were expected to rake in about €4.5 billion ($4.88 billion), according to information obtained by Handelsblatt. Critics within the German ministries of finance, transport and economics are questioning Mr. Grube’s plan to sell the two subsidiaries. They argue he is giving away essential assets in order to reduce debt in the short term. Originally, Mr. Grube wanted to present Deutsche Bahn’s non-executive supervisory board with a plan for the IPOs by February 8. Because of the disagreement with the ministries, supervisory board members now expect the plan to be postponed. Read more in Thursday’s Handelsblatt Global Edition at 12:00 CET.
01/13/2016 - 07:30 PM