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November 7, 1993

BUNDESPOST TELEKOM PRIVATISATION GETS GREEN LIGHT

By CBR Staff Writer

German Postal Minister Wolfgang Boetsch announced on Friday that a compromise had been reached with the opposition Social Democrats over the privatisation of Deutsche Bundespost Telekom and its sister agencies. The two sides agreed that a holding company would be established for the government’s stake of 51% in each of the three companies, and while it would advise, it would have no direct legal control over day-to-day operations. An independent federal postal and telecommunications regulation agency would be set up under the authority of the postal ministry and representatives from the Lnder would have a say in a special board within the agency to be established later. The federal government will retain its majority stake in Telekom and Postdienst for at least five years. There is still the issue of the pension funds, which have an aggregate shortfall of $58,850m; its commitments over the next five years are put at $2,000m a year. The Social Democrats insist that the shortfall must be made up from cash generated by the sale of shares. The government hopes to sell the first 25% tranche of Telekom shares in 1996, the other 24% in 1998.

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