KCS expects NAFTA rail decision in early 2004

KCS expects NAFTA rail decision in early 2004

Kansas City Southern expects an arbitration ruling in its disputed acquisition of a Mexican railroad early next year.

In early 2004, an arbitration panel is expected to issue its decision on the validity of a purchase agreement for TFM S.A. de C.V. between KCS and Grupo TMM S.A., KCS Chairman, President and Chief Executive Mike Haverty said in a statement this week.

In April, TMM agreed to sell to KCS its 38.4 percent TFM stake -- a key link in the U.S. carrier's NAFTA rail strategy -- but TMM shareholders rejected the deal in August. KCS officials believe the acquisition agreement still is valid and in effect until Dec. 31, 2004.

KCS initiated the arbitration proceeding in October. A Delaware Court of Chancery earlier that month granted KCS a preliminary injunction pending resolution of its dispute with TMM. The court also enjoined TMM from taking any action that would violate terms of the acquisition agreement until the dispute is resolved.