(Kansas City Southern issued the following news release on April 28.)
KANSAS CITY — Kansas City Southern (KCS) (NYSE: KSU) today announced that it has received the necessary consents from its Bank Group to consummate the transactions required to place The Kansas City Southern Railway (KCSR), the Texas Mexican Railway Company (Tex-Mex), and TFM, S.A., de C.V. (TFM) under the common control of a single transportation holding company, NAFTA Rail. This announcement follows the previous announcement of a series of agreements on April 21, 2003, between KCS and its partner, Grupo TMM, S.A. (Grupo TMM) that would ultimately result in the formation of NAFTA Rail.
The Bank Group, led by JPMorgan Chase Bank as Agent, specifically approved:
— KCS (NAFTA Rail) investment in further equity interests of Grupo TFM;
— KCS (NAFTA Rail) investment in equity interests representing 51% of Mexrail’s issued and outstanding capital stock;
— Use of KCS cash to acquire Mexrail.
KCS also disclosed today that:
— Its agreements with Grupo TMM give KCS the option but not the obligation to pay $80 million of the $200 million cash component due at close to Grupo TMM with 6.4 million shares of NAFTA Rail stock. This is in addition to the 18.0 million shares included in the equity component of the consideration.
— Grupo TMM may not vote more than 20% of the outstanding voting shares of NAFTA Rail.
— KCS expects to report in its 10-Q for the first quarter of 2003 that its cash on hand at the end of the quarter was $64 million, up from $19 million on December 31, 2002. KCS expects to purchase Mexrail with cash on hand.
KCS will report its First Quarter results on Tuesday, April 29, prior to the opening of trading on the New York Stock Exchange. Company management will discuss the quarter’s financial and operational results, as well as provide further information on the proposed NAFTA Rail transaction at a meeting at the JPMorgan Building at 270 Park Avenue, New York. The meeting will begin at 1:00 p.m. EDT. Those unable to attend can participate via telephone by calling: 1-800-955-1795 (U.S. and Canada) or 1-706-643-0096 (International). The accompanying slides to the presentation will be available on the KCS website, www.kcsi.com, immediately prior to the telephone conference.
KCS is comprised of, among others, KCSR and equity investments in Grupo TFM, Southern Capital Corporation and the Panama Canal Railway Company.