(Grupo TMM issued the following news release on January 13.)
MEXICO CITY — Grupo TMM, S.A. announced that its shareholders unanimously approved the board of directors’ recommendation to sell TMM’s 51 percent voting interest in Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (“TFM”) to Kansas City Southern (“KCS”) at a shareholder meeting held on January 11. As previously announced, under the proposed transaction, the Company will receive $200 million in cash, 18 million shares of KCS common stock, $47 million in a two-year promissory note, and up to $110 million payable in a combination of cash and KCS common stock upon successful resolution of pending issues.
Jose F. Serrano, chairman and CEO stated, “The sale of our interest in TFM will open the door to a new phase in TMM’s history. By significantly reducing our debt, we will once again have access to working and growth capital. We believe that upon completion of this sale, Grupo TMM will be in a position to focus on its operations and to improve cash flow and operating performance. This transaction is truly in the best interests of TMM’s shareholders and will ensure long-term growth and flexibility at TMM.”
Javier Segovia, president of TMM added, “The combination of KCS and TFM creates an efficient shipping route between the U.S. and Mexico, a truly integrated railroad service, from Mexico’s Pacific coast up to the Great Lakes. Through its ownership in Kansas City Southern shares, TMM will have an estimated 22 percent interest in a valuable franchise and a strong rail alternative with more than 5,281 miles of main track to service its clients. This transaction will provide significant opportunities to both KCS and TMM.”
Consummation of the transaction remains subject to the satisfaction of certain conditions, including KCS shareholder approval and satisfaction of the requirements of the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, which had been obtained prior but expired and were re-filed in December 2004.
Headquartered in Mexico City, TMM is a Latin American multimodal transportation company. Through its branch offices and network of subsidiary companies, TMM provides a dynamic combination of ocean and land transportation services. As of the date of this release, Grupo TMM holds the control interest in Grupo TFM, which operates Mexico’s Northeast Railroad and transports 40 percent of the country’s rail cargo. Upon the consummation of the proposed transaction, Grupo TMM will be the largest shareholder of Kansas City Southern, owning approximately 22 percent of Kansas City Southern’s outstanding shares. Visit TMM’s web site at http://www.grupotmm.com and TFM’s web site at http://www.tfm.com.mx. Both sites offer Spanish/English language options.