Many Ex-East German Firms Go for a Song

Hundreds of businessmen elbowed their way into a small stand at the Leipzig trade fair Sunday to take their pick of the former East Germany’s 8,000 state-owned companies.

Four computer terminals allowed investors to trawl the Treuhand privatization agency’s data bank of former communist-run companies, many up for grabs at knock-down prices.

The Leipzig fair used to be a showcase for East German companies. But the Treuhand is selling them as quickly as possible at this year’s exhibition to anyone who wants them.

“It’s great to have this access to all these firms,” said Italian businessman Theo Grosse, clutching computer printouts on 60 construction companies.

Although it has has already sold nearly 1,000 firms, the Treuhand is under pressure to rid itself of the rest to reduce state subsidies on them.

Helmut Wotte, manager of the Treuhand’s Dresden branch, said some companies--making anything from nuts and bolts to baby clothes and computer parts--are going for a book value as low as one mark (60 cents).

But buyers would have to take over company debts and could face huge compensation claims for environmental damage already caused.

“What we’re really interested in is jobs and investment,” Wotte said.

Reunification of Germany has meant that the former West Germany’s well-run industrial giants have swamped the former East’s inefficient companies, threatening the area that once was East Germany with massive unemployment.

The Treuhand says it owns around $320 billion in assets, but much of it consists of land.

The former East’s decrepit companies have debts of more than $80 billion.