KfW disposes of billions-worth Telekom stocks.

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KfW is again selling Telekom stocks, releasing a billion euros for the federal government. As per the Federal Finance Ministry, the funds will be used by the bank. "The federal government will utilize the net earnings from the transaction to enhance Deutsche Bahn AG's equity capital and construct modern railway infrastructure in Germany," the ministry stated on Monday evening. These shares have been acquired by large investors.

KfW divests 110 million Telekom shares

On Monday, after the stock market had closed, KfW revealed it had sold 110 million shares of DAX company Deutsche Telekom to institutional investors. "Notwithstanding the challenging market scenario, the placement was smoothly accomplished," the ministry said. Selling the shares at a cost of 22.13 euros, KfW made approximately 2.43 billion euros. As a result, the shared ownership of KfW and the federal government in Deutsche Telekom AG reduced to roughly 27.8%.

The Federal Government continues its shareholder role in Telekom

According to the ministry, the federal government is carrying on with its accountable privatization policy. "Considering the unaltered federal interest, the federal government and the KfW will remain the crucial shareholders of Deutsche Telekom AG and maintain the essential stakeholding," the ministry added. KfW is prohibited from selling any more Telekom shares without the approval of the presiding banks within the following three months.

"The KfW and the federal government will continue to be the largest shareholders of Deutsche Telekom AG," KfW's announcement also read. In the second quarter, KfW had already disposed of 22.4 million shares in the stock market. By the end of 2023, the federal government, along with KfW, still possessed around 30% of Telekom. At that time, the Japanese Softbank Group retained a 4.5% stake.

Share sales help infuse funds into the federal coffers

In February, KfW had also sold a Post shares bundle worth nearly 2.2 billion euros. The government requires money due to the budget discussions and the ailing German railway network. The federal government intends to modernize the railway system with billions of euros in the coming years - plans that became muddled by the Constitutional Court's ruling in November last year. However, it was affirmed in mid-December that there would be no budget cuts for the railway.

Read also:

1. Despite selling billions of euros worth of Telekom stocks, KfW still maintains a significant stake in the German telecommunications giant.
2. The Federal Ministry of Finance approves of employing the funds obtained from the sale of Telekom shares to improve German Railways' infrastructure.
3. German Railways stands to benefit from the billions of euros allocated by the government for modernizing its rail network.
4. Banks in Frankfurt and other stock exchanges across Germany will likely purchase a portion of the Telekom shares being sold by KfW.
5. The KfW Banking Group, as a development bank in Germany, has played a crucial role in financing the country's telecommunications sector for many years.
6. Large financial institutions, including those in Berlin, have shown interest in investing in German Telekom following KfW's disposal of shares.
7. Billions in profits generated from share sales by KfW can significantly contribute to Germany's economic development and growth.
8. The BMF, or Federal Ministry of Finance, is closely monitoring the sale of Telekom shares by KfW and ensuring compliance with German financial regulations.

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