KPN has cut debt and restored profits

The Dutch government has sold more than a third of its stake in struggling Dutch phone firm KPN for 2bn euros ($2.26bn; �1.4bn).

"There is no reason for the government to remain a minority stakeholder in KPN. We could sell more in the future," a spokesman for the Dutch Finance Ministry said.

It sold the 12% stake in KPN to US investment bank Citigroup, which has announced plans to sell on the 300 million shares.

The state still owns 19.3% of KPN which it cannot legally sell for another 12 months.

Looking stronger

KPN was close to collapse in 2001 after an acquisition frenzy at the height of the telecoms boom left it with debts of 22bn euros (�15.8bn; $25.5bn).

But the business has started to pick up, returning to profit in the first quarter of 2003 after cutting costs and restructuring to trim its debts.

Chief executive Ad Scheepbouwer said then that the firm's key objective was to restore real growth.

KPN's goal is to cut its debts to 10bn euros by the end of 2003.