KCS, TMM to purchase remaining Mexico-controlled share of TFM (6/13/2001)


Transportación Ferroviaria Mexicana S.A. de C.V. owners Kansas City Southern Industries and Transportación Maritima Mexicana S.A. de C.V. June 13 announced plans to acquire the Mexican government’s remaining 24.6 percent ownership of TFM sometime during the third quarter.

Mexico’s TFM stake is worth about $249 million, but KCS and TMM plan to subtract $81 million from the purchase price due to TFM’s previous sale of a redundant 18-mile Hercules-to-Mariscala line to the government.

The remainder of the purchase price would be paid at the TFM level through a combination of cash and debt financing.

KCS and TMM in 1996 formed TFM to assume control of Mexico’s Northeast Railway, with TFM owning 80 percent and the Mexican government retaining 20 percent ownership along with a 24 percent TFM stake. The transaction included an option enabling KCS and TMM to buy-out the government’s shares at any time.

KCS and TMM plan to purchase the remaining 20 percent of the Northeast Railway from Mexico sometime later this year.

Source: Progressive Railroading Daily News