Troubles So Far Don't Delay Telekom's Plan to Sell Stock the $66 Billion German Telephone Company Is Likely to Be the Biggest Privatization in European History

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THE combination of the resignation of Deutsche Telekom's chairman, a couple of regulatory hassles, and a phone sex scandal among some employees might well be expected to dampen investor interest in a public offering of the national telephone company's stock.

But not so far. Given the possibilities of the information superhighway and the status of Telekom as the world's third-largest phone company, plenty of people still want a piece of the German carrier's action.

"The current news should be well put to bed by the time it {Telekom} comes to market," says Patrick Earle, a telecommunications analyst with investment house J. P. Morgan & Co. Inc. in London.

"There's still a lot of water that will go under the bridge," Mr. Earle continues. "But it clearly has potential."

Deutsche Telekom - estimated to be worth about $66 billion - is likely to be the biggest privatization in European history. The first step came Jan. 1, when Germany's Post Ministry formally transformed Telekom, along with the postal service and postal bank, into joint-stock companies.

The phone company's first share offering is expected in 1996. The German government plans to retain a majority stake in Telekom at least until 1998.

Two German financial institutions, Deutsche Bank and Dresdner Bank, will anchor the consortium handling the share offering. The third major participant is international banking firm Goldman, Sachs & Co. in New York, which will be chief coordinator for selling Telekom stock to investors abroad.

Telekom officials envision that up to 60 percent of the initial offering will go to German investors; about 20 percent should be allotted for sale in the United States; 10 percent in Britain; and the remainder elsewhere.

The future may appear lucrative, but the present has seen Telekom hit by a series of negative news reports, some more embarrassing than substantial. In early December, for instance, investigators uncovered a scam that bilked the telephone company out of millions of dollars. Employees ran up huge phone bills to Caribbean-based phone-sex operators.

The Post Ministry was required by law to pick up the tab for the fraudulent calls, while the employees received kickbacks from the phone-sex operators. Two Telekom workers have been arrested in connection with the operation. …