From the Reuters wire, this interesting bit of news on TMM and TFM. Will there be a merger or not? Stay tuned....... KCS Regains Partial Control of Mexican Railroad Author: TO News from Press Reports Kansas City Southern appeared to regain partial control Tuesday of the Mexican railroad it jointly owns with Grupo TMM of Mexico City. Since the fall, majority owner Grupo TMM has operated the railroad using powers of attorney that ostensibly allowed the railroad to execute multimillion-dollar transactions without KC Southern's approval. The Delaware Court of Chancery ordered TMM to revoke those powers of attorney and restore KC Southern's role in approving transactions greater than $2.5 million. The court is overseeing a dispute between the companies that arose from TMM's August decision not to sell the railroad to KC Southern after signing a sales agreement in April. Warren Erdman, KC Southern vice president of corporate affairs, said the company hasn't determined whether TMM executed any big transactions without KC Southern's approval. "We are inquiring," Erdman said. "We are not aware of any transactions that they might have engaged in using that power of attorney. Mexico's TMM gets more support to restructure January 12, 2004 4:04:00 PM ET MEXICO CITY, Jan 12 (Reuters) - Mexican transport firm Grupo TMM said on Monday that more debt holders had agreed to a $377 million debt restructuring, although the participation of more investors was needed to pull the deal off. Grupo TMM said in a statement that holders of about 64 percent of $177 million of senior notes due 2003 and $200 million of senior notes due 2006 had agreed on the terms of a debt restructuring. About a month ago, the company said only 43 percent of the note holders were willing to participate in the offer, where new senior secured notes would be exchanged for existing notes. TMM's deal will only go through if 95 percent of the 2006 notes' principal and 98 percent of the 2003 notes' principal are tendered for exchange. TMM is aiming to close the offer successfully by June 30, spokesman Marco Provencio told Reuters. "We're going to continue to work hard over the next months to be able to get the necessary commitment," he said. If TMM fails to get enough investors on board, the company's debts will be paid out according to Mexico's equivalent of a bankruptcy court, Provencio said. The new notes, which will mature in three years, will consist of senior obligations of TMM, backed by the company's wholly-owned subsidiaries except for Grupo TFM, its rail unit. Analysts have said that the bond restructure at TMM could give the company some time to find a potential bidder for its TFM unit, in which it holds 41 percent. TMM is in the process of recovering a value-added tax (VAT) refund valued at nearly $950 million. TMM's American Depositary Receipts (TMM) traded nearly 7 percent higher on Monday at $4.30, while its local shares remained untraded. REUTERS © 2004 Reuters
IMO, this is a high-stakes poker game, and Mike Haverty is playing the role of a high-rolling gambler. Thing is, KCS is kinda tight on cash these days (the railroad overpaid for Midsouth, thanks to the leadership before Haverty), and it is a David surrounded by Goliaths. I wouldn't be too surprised to see either CN or CP pick up the KCS later on down the road....... ......but again, this is just my opinion........
