(The following appeared on the Kansas City Star website on January 7, 2010.)
KANSAS CITY, Mo. — Kansas City Southern has begun a tender offer to buy back up to $240 million of its debt.
The railroad company said the offer to buy its 9.375 percent notes due in 2012 will expire on February 4, unless otherwise extended.
Those who tender their notes by Jan. 21 will receive $1,041.25 for each $1,000 principal amount of notes accepted for purchase, Kansas City Southern said.
Noteholders who tender after Jan. 21 but prior to the expiration will be entitled to 1,011.25 for each $1,000 in principal notes accepted for purchase, the company added.
Kansas City Southern said it reserves the right to end the tender offer after the early Jan. 21 deadline if $240 million in notes have already been tendered.
Also, in a regulatory filing, Kansas City Southern said has been sued over the 1997 bidding process the ultimately led to the railroad acquiring Mexico’s biggest rail line from the Mexican government.
A competing bidder filed the suit, contending that Kansas City Southern and the Mexican government violated rules in the bidding process.
Kansas City Southern de Mexico said it believes the lawsuit is “totally without merit” and believes the suit will be resolved in its favor. The suit is not expected to have a material impact on the company, Kansas City Southern said.