Copyright 2002, Traffic World Magazine
Kansas City Southern Industries has sold its share of Mexrail Inc., the holding company for the Texas Mexican Railway, to Grupo Transportacion Ferroviaria Mexicana S.A. de C.V. TFM is a subsidiary of KCSI's Mexican partner Grupo TMM. Grupo TMM and KCSI received $32.64 million and $31.36 million, respectively, for their 51 percent and 49 percent shares in Mexrail.
The change in ownership took place as part of the companies' settlement of a dividend payout dispute. As a result of a court order, the dividend declared by Grupo TFM last December has been annulled and the litigation between the parties terminated.
Tex Mex operates from Laredo to Corpus Christi, Texas, and over trackage rights to Beaumont, Texas, where it connects with KCS Railway. Mexrail also owns the northern half of the International Bridge at Laredo, the primary railway bridge connecting Mexico and the United States. The TFM rail system connects with the Tex Mex over the International Bridge.
"We are very pleased to have resolved and put behind us the disagreements regarding Grupo TFM in a way that is satisfactory to both parties," said Grupo TMM Chairman and CEO Jose Serrano and KCSI Chairman, President and CEO Michael Haverty in a joint statement. "We also believe the consolidation of Mexrail into TFM will help better coordinate operations between the companies and open up new rail market opportunities."
KCS still holds a 37 percent share in TFM. The other TFM shareholders are TMM (38.5 percent) and the Mexican government (24.5 percent).