Russia Rides the German Rails
Russian Railways intends to buy 5 percent of the shares in the German Deutsche Bahn railway, when it holds its IPO in the coming weeks, Russian Railways president Vladimir Yakunin told The International Herald Tribune. "For us, integration is an essential part of our strategy. Obtaining a stake in Deutsche Bahn's international public offering would be a good investment,” Yakunin said. He did not comment on the deal further.
In May, Deutsche Bahn separated its passenger, cargo, service and logistics operations into Deutsche Bahn Mobility and Logistics. That company will now place 24.9 percent of stock on the Frankfurt Stock Exchange. The railroad infrastructure will remain state property. Deutsche Bahn’s receipts in 2007 totaled ˆ31.3 billion and net profit was ˆ1.7 billion. German government representatives said in the spring that they expect to take in no less than ˆ5 billion in the IPO. European investment banks agreed with that estimate, saying the value of the company may even grow to ˆ32 billion.
If the 24.9-percent share of Deutsche Bahn will be worth ˆ5 billion, Russian Railways will pay ˆ1 billion for a 5-percent share in the company. Analysts doubt the railway can raise that amount of money without government assistance. Banks cannot be counted on to provide those funds at the moment. The world financial crisis may also lead to a discount on the Deutsche Bahn share package, however.
www.kommersant.com
All the Article in Russian as of Sep. 26, 2008
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