(Reuters circulated the following article on July 10.)
MEXICO CITY — Mexico’s antitrust authority said on Thursday it gave the go-ahead for Mexico’s Grupo TMM to sell its stake in railroad company Grupo TFM for $412 million to U.S. railroad operator Kansas City Southern Industries.
Kansas City Southern — after buying the Grupo TFM stake for cash and equities from financially stressed TMM — will change its name to NAFTA Rail, which will be a U.S.-listed holding company.
TFM is currently 41 percent owned by Grupo TMM, 39 percent owned by Kansas City Southern and 20 percent owned by the Mexican government.
It holds a concession to operate through 2047 the only Mexican freight line to Laredo, Texas, which is by far the busiest U.S. entryway for Mexican rail freight.
The deal, agreed to in April, still must be approved by Mexico’s foreign investment regulator and the U.S. Federal Surface Transportation Board.
TMM, in default of $177 million in bonds since May 15, said at the end of May it had reopened talks with creditors to restructure its debt.
TMM and its creditors agreed to negotiate once the company lost a court-sanctioned one-year reprieve from its debts. TMM lost the reprieve after a judge overturned a previous ruling because of “irregularities” in the lawsuit.
TMM’s stock was not traded on Thursday, while its normally volatile American Depositary Receipt (ADR) fell 8 percent to $2.76.