STATE INTERVENTION

Plan B for Deutsche Bahn

BERLIN, GERMANY - SEPTEMBER 14: German Transport and Digital Technologies Minister Alexander Dobrindt (L) and Deutsche Bahn head Ruediger Grube attend the official presentation of the new ICE 4 high-speed train at Berlin's Hauptbahnhof main railway station on September 14, 2016 in Berlin, Germany. Deutsche Bahn will buy at least 100 of the trains, which are manufactured by Siemens and Bombardier, in its biggest investment since World War II. (Photo by Sean Gallup/Getty Images)
They won't be smiling if the state has to intervene. German Transport Minister Alexander Dobrindt (left) and Deutsche Bahn chief Rüdiger Grube (right).
  • Why it matters

    Why it matters

    Deutsche Bahn is trying to keep its debt below €20 billion to avoid higher refinancing costs.

  • Facts

    Facts

    • The German state, Deutsche Bahn’s majority shareholder, has thrown cold water on plans to partially privatize the British subsidiary Arriva and the logistics unit Schenker.
    • The government has come up with an alternative plan to appropriate another €1 billion for Deutsche Bahn in the federal budget.
    • Under the plan, the government would also forgo annual dividend payments of €350 million for four years, which adds up to another €1.4 billion in financial assistance for Deutsche Bahn.
  • Audio

    Audio

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Deutsche Bahn’s majority shareholder, the German state, has presented the railway operator with a Plan B after moving to block a bid to partially privatize British subsidiary Arriva and the logistics unit Schenker.

The federal government plans to shore up Deutsche Bahn’s troubled finances with a €2.4-billion ($2.6-billion) capital injection. According to Handelsblatt sources, the railway operator’s executive board will present the new strategy to the supervisory board, which oversees corporate strategy, in December.

Deutsche Bahn Chief Executive Rüdiger Grube had originally planned to raise up to €4.5 billion by selling 40 percent of Arriva and Schenker in initial public offerings in 2017 on the London Stock Exchange and Frankfurt Stock Exchange.

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