FRANKFURT, (AFP) - Kreditanstalt fuer Wiederaufbau (KfW), the state owned bank that the German government uses as a vehicle for privatisation, is selling via the open market a stake of around seven percent in telecommunications giant Deutsche Telekom.
KfW said in a statement it planned to sell shares and warrants on shares in Deutsche Telekom worth up to 4.5 billion euros (5.6 billion dollars) to institutional investors.
"We are continuing the privatisation of Deutsche Telekom, via a combined placement of shares and warrants," KfW said.
KfW currently holds a stake of 16.7 percent in Deutsche Telekom, or around 703 million shares in total.
The German government holds a further 26.1 percent directly.
Based on the current share price of around 15 euros per share KfW's stake is worth around 10.5 billion euros.
KfW said it would sell up to three billion euros worth of shares, or around 200 million shares in all to institutional investors.
Depending on demand, it would sell an additional greenshoe or over-allotment option of 30 million shares or 450 million euros.,
And on top of that it would place one billion euros worth of warrants exchangeable for some 70 million shares.
The warrants would be issued in three tranches, exchangeable for the Deutsche Telekom shares after six, 12 or 18 months.
KfW said that Citigroup, JP Morgan and Morgan Stanley were joint bookrunners and joint lead managers for the issue.