Deutsche Post cuts
Logistics company Deutsche Post says it will use the proceeds of its recent initial public offering to cut its pension obligations.
The company has sold stock and an exchangeable bond in its consumer-banking arm Postbank in Germany’s largest IPO since 2000.
“Deutsche Post generated total income of around E2.6bn, from this transaction, which will be used to reduce pension obligations in particular,” the group says.
According to its interim report provisions for pensions and other employee benefits rose to E6.41bn as at the end of June this year - up from E6.35bn at the end of 2003.
And in its 2003 annual report it disclosed that its present value of pension obligations as at 31 December 2003 was E7.03bn.
Deutsche Post said in that report that it believed “that pension provisions in Germany represent capital that the company has at its long-term disposal”.
It added: “All of the company’s pension provisions are covered by operating assets. Therefore, there is no underfunding.”