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Business Briefs

Deutsche Telekom is back on the path to profit, Deutsche Bahn fires two execs over failed pricing system and ThyssenKrupp sells off assets.

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Deutsche Telekom is cleaning up for a year of change

2003 'year of change' for Deutsche Telekom

Deutsche Telekom chairman Kai-Uwe Ricke pledged Tuesday that 2003 would be a "year of change" following a particularly difficult 2002. Last year was "the most difficult year in the history of our company," Ricke told a gathering of 7,000 shareholders at Telekom's annual shareholders meeting in Cologne. In 2002 Germany's telecommunication behemoth booked a net loss of €24.6 billion ($28.6 billion), the largest amount of red ink ever spilled by a European company. But things are now beginning to look up for the company. After reporting a positive first-quarter turn-around of €850 million, Telekom is moving "back on the path to profit," Ricke said. Last year, Ricke took over the helm of Telekom after a six-month search for a successor to replace former chairman Ron Sommer, who was ousted over Telekom's growing debt load and a string of bad acquisitions.

Deutsche Bahn fires two execs, changes fare system

Germany's national railway, Deutsche Bahn, announced on Tuesday it would reorganize its management in the wake of disappointing earnings tied to its recently revamped and oft-criticized pricing system. Deutsche Bahn's supervisory board said it would cancel the contracts of two managers responsible for the new pricing system. The group's chairman Hartmut Mehdorn, whose contract was extended until 2008, said the decision was "a result of differing opinions about how the current economic difficulties and the poor acceptance of individual elements of the new pricing system could be resolved." The new pricing system went into effect in December and was aimed at encouraging passengers to book in advance by offering them airline-style discounts for advance purchases. The system, however, came under criticism for being too complicated and more expensive than previous pricing systems. At the board meeting on Tuesday, Mehdorn said individual elements of the fare system would be reviewed in light of growing customer frustration and low ticket sales.

ThyssenKrupp plans asset sale to cut debt

The German industry and steel giant ThyssenKrupp said its supervisory board approved plans to sell off €7 billion in assets as part of the company's debt reduction scheme. The company plans to divest itself of businesses outside its core areas and instead concentrate on the steel, capital goods and service sectors. Through selective sales and strategic acquisitions, ThyssenKrupp said it hoped to raise annual sales to €40-46 billion in the medium-term, up from €36.7 billion in the previous year. The company also announced on Monday that it had bought back 16.9 percent of its own shares from IFIC Holding, which is owned by the Islamic Republic of Iran. The buyback deal, which comes with a price tag of €406 million, is aimed at averting what ThyssenKrupp described as "serious imminent harm to the company" from threatened U.S. restrictions.

Compiled with information from wire services.