Business | Investment
Deutsche Bahn eyes UAE investment
German rail operator Deutsche Bahn is seeking investments from institutional investors in Dubai and Abu Dhabi, Reuters reported on Sunday quoting Der Spiegel, a German language magazine.
- Gulf News Report
- Published: 23:49 July 27, 2008
Dubai: German rail operator Deutsche Bahn is seeking investments from institutional investors in Dubai and Abu Dhabi, Reuters reported on Sunday quoting Der Spiegel, a German language magazine.
According to the report chief executive Deutsche Bahn Hartmut Mehdorn and chief financial officer Diethelm Sack recently met institutional investors in Dubai and Abu Dhabi about sale of stakes in the rail operator ahead of its initial public offering scheduled for the fourth quarter of this year.
The magazine report quoted Bahn sources as saying the representatives from both banks and investment funds were "very interested" in obtaining stakes in the IPO, which is expected to be Germany's biggest flotation since 2000.
Mehdorn has previously said that Russian investors were interested in obtaining a stake. The government expects the IPO to raise between five billion and eight billion euros ($7.9-$12.6 billion).
About 80-90 per cent of the shares are expected to go to long-term institutional investors, with only 10 per cent likely to go to retail investors and employees.
Under the plan, 24.9 per cent of Deutsche Bahn's passenger transport, logistics and services businesses will be sold, while the track, stations and energy supply will remain the property of the state.
Proceeds from the sale will be used to fund expansion in Deutsche Bahn's logistics business, including through acquisitions and joint ventures in growth areas such as Eastern Europe.
Earlier this month, Mehdorn said he is optimistic that the company will find demand among investors for its planned partial privatisation, in an interview with Die Welt newspaper.
"Worldwide there are several hundred billion dollars and euros that are looking for a safe harbour," Mehdorn said, according to an excerpt of an interview in Die Welt.
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