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DEUTSCHE BANK SUGGESTS SMOOTHING THE WAY FOR VENTURE CAPITAL IN THE NEW FEDERAL STATES

 DEUTSCHE BANK SUGGESTS SMOOTHING THE WAY FOR VENTURE CAPITAL
 IN THE NEW FEDERAL STATES
 FRANKFURT, Germany, Jan. 14 /PRNewswire/ -- The work of Germany's Treuhandanstalt constitutes the largest privatization process in history, Deutsche Bank analysts write in their latest edition of the "Unification Issues" series.
 The Treuhand's growing costs and complex management tasks have given rise to suggestions for improving the privatization process. They range from increased subsidies to the creation of smaller, partially state-owned industrial holding companies.
 By contrast, Deutsche Bank's concept entails independent venture capital companies which would take over firms and groups of firms from the Treuhand, restructure and then sell them again, if possible taking them public. This method avoids redundant state-owned companies and subsidization policies, smoothing the way for market mechanisms in the privatization and restructuring process.
 As of November 1991, the Treuhand has earned DM 16 billion from the sale of almost 5,000 large East German firms, notes DB Research, the bank's research arm. Some 808 of these transactions were management buy-outs. Sales of corporations continue at a rate of 25- 30 a day. Over 10,000 large firms remain for sale, many having been split off from former conglomerates.
 Foreign participation in the privatizations is led by French business, which has bought 44 firms or about 20 percent of total foreign purchases. France is followed by Switzerland (37), the United Kingdom (25), the Netherlands (20), Austria (17) and Sweden (15). Ten firms were bought from the Treuhand by U.S. subsidiaries in Germany and Western Europe, DB Research points out.
 -0- 1/14/92
 /CONTACT: Ingelies Buhl of the Deutsche Bank Economics Department, Franfurt, 011-49-69-7150-4717, or Ute DeFarlo, TransAtlantic Futures, 202-462-1222/ CO: TransAtlantic Futures, Inc.; Deutsche Bank ST: IN: FIN SU:


MH -- DC007 -- 9472 01/14/92 10:34 EST
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Publication:PR Newswire
Date:Jan 14, 1992
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