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

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 yesterday [Macau time] 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 yesterday.

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.

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