DEUTSCHE Bahn AG, Germany's state-owned railway, said the DB Mobility Logistics AG train unit's initial public offering is proceeding, with the stock to begin trading on the Frankfurt exchange on October 27.

Investors remain interested in purchasing the 24.9-percent stake on offer, even with financial markets being "tense," the Berlin-based company said yesterday in a statement.

"In our discussions so far with investors we've had a lot of feedback we're very pleased with," Chief Executive Officer Hartmut Mehdorn said in the statement.

The German government estimates that DB Mobility's IPO will raise 5 billion euros (US$7.3 billion), two-thirds of which would be used to increase Deutsche Bahn's capital and upgrade infrastructure. Proceeds from the sale will be spent on expanding existing operations as well as acquisitions, the railway said. The IPO follows the state's disposal of Deutsche Post AG in 2000 and Deutsche Telekom AG in 1996, Bloomberg News said.

Deutsche Bahn plans to sell the division's shares in Japan as a public offering without listing, and won't offer them in the United States, the company said.

Railway executives will begin a promotional tour for institutional investors on October 13.