Open

Coming up

Don't miss

Replay


LATEST SHOWS

DEBATE

Child Migrants In America: What to do about the wave of unaccompanied minors?

Read more

THE INTERVIEW

Abbas Araghchi, Iranian deputy foreign minister

Read more

THE OBSERVERS

More of this year's best Observers stories

Read more

FOCUS

When water becomes a weapon of war

Read more

ENCORE!

Eve Ensler: 'In The Body Of The World'

Read more

THE INTERVIEW

Ed Husain, Author of 'The Islamist'

Read more

DEBATE

Pakistan Protests: Democracy put to the test

Read more

DEBATE

Pakistan Protests: Democracy put to the test (part 2)

Read more

REPORTERS

Pakistan: Imran Khan, from the cricket field to politics

Read more

  • IS video purports to show beheading of second US journalist

    Read more

  • Trust and 'bio-disaster units' needed to fight Ebola

    Read more

  • Video: Bodies ‘left behind’ as Ukraine forces flee rebel assault

    Read more

  • France vows crackdown on unemployment benefit ‘abusers’

    Read more

  • Julie Gayet wins privacy case against French glossy Closer

    Read more

  • Germany blocks popular car pick-up service Uber

    Read more

  • Several UN peacekeepers killed in Mali explosion

    Read more

  • NATO plans new 'spearhead' force to counter Russia

    Read more

  • French clubs left behind as others spend big

    Read more

  • Britain drops arrest warrant for ill boy’s parents

    Read more

  • When water becomes a weapon of war

    Read more

  • Arab media strike back at IS Islamists – with cartoons

    Read more

  • US military targets Somalia's al Shabaab Islamist group

    Read more

  • Eve Ensler: 'In The Body Of The World'

    Read more

  • Boko Haram Islamists seize northeast Nigerian town

    Read more

  • Is Carla Bruni against a political comeback for Sarkozy?

    Read more

  • Monaco’s Falcao leaves Ligue 1 for Man Utd

    Read more

  • UN backs Iraqi request for inquiry into IS militant crimes

    Read more

German government delays Deutsche Bahn IPO

Latest update : 2008-10-09

The German government has postponed the initial listing of shares in the country's railway operator Deutsche Bahn to an unspecified date in the context of turbulent stock markets. The company's partial privatisation was planned for October 27.

The German government delayed a multi-billion euro initial public offering (IPO) of rail operator Deutsche Bahn on Thursday, citing extreme turbulence and uncertainty on global financial markets.

Expected to be Germany's largest IPO in eight years, the partial privatisation of Deutsche Bahn had been set for Oct. 27 but was pushed back to an unspecified future date that will depend on an improvement in market conditions, the German finance ministry and the company said on Thursday.

Deutsche Bahn, which had firmly rejected any suggestions of delay for weeks, was the latest IPO casualty of the global crisis after other flotations were called off in recent weeks.

"In face of the extremely high volatility and uncertainty on global capital markets, especially since the beginning of this week, we have decided together with our owner, the federal government, to adjust the time plan," Deutsche Bahn CEO Hartmut Mehdorm was quoted as saying in a statement issued by the ministry.

Sources close to the firm said earlier it could be postponed until next spring.

"As soon as the market environment permits a successful initial public offering, we're ready to go," German Finance Minister Peer Steinbrueck said in the statement. "The Bahn IPO will happen."

Mehdorn has been pressing for years to sell a stake in the company in order to help finance expansion. After years of political wrangling, Chancellor Angela Merkel's government overcame internal differences and cleared the way for the October listing.

Shares representing 24.9 percent of Deutsche Bahn's Mobility Logistics unit were due to be offered to private and institutional investors inside Germany and to institutional investors abroad through a private placement.

But concerns about the timing of the part-privatisation had grown as a result of sharp stock market falls around the world. The DAX index of leading German stocks has fallen about 39 percent this year. It is down 15 percent this month alone.

The global market for IPOs collapsed in the third quarter of this year in its worst performance since early 2003, data from Thomson Reuters has shown.

On Wednesday, German solar technology company Schott Solar said it had decided to call off its IPO, pointing to the "dramatic deterioration in international capital market conditions in the past days".

Earlier this week, Steinbrueck had publicly questioned the timing of the Deutsche Bahn flotation due to the crisis in world markets. But Deutsche Bahn responded there had been no negative signs for the IPO from the market.

Analysts have progressively scaled back estimates of what they expect the IPO to raise to as little as 4 billion euros.

The sources close to the firm said on Thursday Deutsche Bahn was hoping to raise at least 4.5 billion euros.

Mehdorn said the company had received positive feedback from investors.

"Our equity story is being understood and people accept that we are a safe and solid value," he said.

Date created : 2008-10-09

COMMENT(S)