GERMANY - German national railway operator Deutsche Bahn is holding talks with large pension funds over its planned privatisation - institutional investors could take over as much as 50% of the shares, it was said. 

Hartmut Mehdorn, chief executive of Deutsche Bahn, was today quoted by German newspaper Handelsblatt as saying that the management of the state-owned firm is already in talks with various potential investors.

Handelsblatt wrote that institutional investors such as large pension funds could  acquire a quarter of the capital, and this could eventually be increased to a share of almost 50%.

The Transport Ministry told IPE today that the plans can only go ahead after a new privatisation law will have been passed.  "This will not be before 2008 or 2009," a spokeswoman said.

Deutsche Bahn declined to comment which parties are involved and how far talks have so far progressed, saying that it is their policy not to comment on the privatisation plans.

However, Norbert Hansen, leader of  the German Transnet union, warned that strikes will occur if Deutsche Bahn does not guarantee employment.

He said that he would welcome pension funds as investors, but objects to pure "finance investors" such as hedge funds.