Deutsche Post to receive 1 bln Euro repayment after court ruling

Deutsche Post World Net will receive a repayment of around 1 billion euros after the European Court of the First Instance in Luxembourg today overturned a 2002 decision by the European Commission. The European Commission in 2002 ordered Deutsche Post to repay 907 million euros in purported state aid and interest. Deutsche Post in 2002 appealed the decision and will now receive a repayment. Responding to the decision, Deutsche Post said the court had confirmed the company's legal position. The company expects to receive the cash inflow in several weeks' time and would prefer to earmark the amount for returning to shareholders, pending clarity regarding other cash-relevant issues.

In June 2002, the Commission determined that Deutsche Post from 1994 to 1998 covered a cost deficit in the competitive business parcel segment through improper crosssubsidization with State aid funds earmarked for the financing of the universal service.

Deutsche Post has always disputed this claim. Furthermore, no cross-subsidization was found in Commission antitrust proceedings completed a few months earlier. In September 2002, Deutsche Post brought an action for annulment of the Commission's state-aid decision before the European Court of the First Instance. As a result of the Commission's decision, however, Deutsche Post had to repay 572 million euros that was determined to be state aid plus 335 million euros in interest to the Federal Republic of Germany at the beginning of 2003. Germany will now repay this amount with interest to Deutsche Post.