SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported):
August 16, 2004
KANSAS CITY SOUTHERN
(Exact name of company as specified in its charter)
DELAWARE 1-4717 44-0663509
(State or other (Commission file (IRS Employer
jurisdiction of incorporation) number) Identification Number)
427 West 12th Street, Kansas City, Missouri 64105
-------------------------------------------------
(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code:
(816) 983 - 1303
Not Applicable
(Former name or former address if changed since last report)
Item 5. Other Events
Grupo TMM, S.A. ("Grupo TMM") and Kansas City Southern ("KCS" or "Company")
announced on August 16, 2004, an agreement for TFM, S.A. de C.V. ("TFM") to sell
to KCS, Mexrail, Inc. ("Mexrail") shares representing a 51 percent ownership of
Mexrail for approximately $32.7 million (U.S.). The sale closed on August
16, 2004. KCS will repay to TFM on or before January 1, 2005, certain advances
from TFM in an amount of approximately $9.0 million and paid to Grupo TMM at
the closing outstanding payables of approximately $400,000. See the Press
Release attached hereto as Exhibit 99.1 for further information.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Document
(99) Additional Exhibits
99.1 Press Release issued by Kansas City
Southern dated August 16, 2004,
entitled, "Grupo TMM and Kansas
City Southern Announce Agreement
To Sell Controlling Interest in
Mexrail to Kansas City Southern" is
attached hereto as Exhibit 99.1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this Report to be signed on its behalf by the undersigned
hereunto duly authorized.
Kansas City Southern
Date: August 18, 2004 By: /s/ James S. Brook
-------------------------------------------
James S. Brook
Vice President and Comptroller
(Principal Accounting Officer)
EXHIBIT 99.1
Grupo TMM, S.A.
Brad Skinner, Investor Relations
011-525-55-629-8725 or 203-247-2420 or brad.skinner@tmm.com.mx
Dresner Corporate Services
Kristine Walczak (general investors, analysts and media)
312-726-3600 or kwalczak@dresnerco.com
Proa/StructurA
Marco Provencio, Media Relations
011-525-55-629-8708 and 011-525-55-442-4948 or mp@proa.structura.com.mx
Kansas City Southern
In the U.S.
Warren K. Erdman, Vice President of Corporate Affairs
816-983-1454 or warren.k.erdman@kcsr.com
In Mexico
Gabriel Guerra, Media Relations
011-525-55-273-5359 or gguerra@gcya.net
Grupo TMM and Kansas City Southern Announce Agreement
To Sell Controlling Interest in Mexrail to Kansas City Southern
Kansas City, MO. August 16, 2004 Grupo TMM, S.A. (TMM) (NYSE: TMM) and Kansas
City Southern (KCS) (NYSE: KSU) today announced an agreement for TFM, S.A. de
C.V. (TFM) to sell to KCS, Mexrail, Inc. (Mexrail) shares representing a 51
percent ownership of Mexrail for approximately $32.7 million (U.S.). The sale
will close today. KCS will repay to TFM on or before January 1, 2005, certain
advances from TFM in an amount of approximately $9 million and will pay to Grupo
TMM at the closing outstanding payables of approximately $400,000.
The sale will be made on terms substantially similar to those previously agreed
to by the parties in April of 2003. Mexrail wholly owns The Texas-Mexican
Railway Company (Tex-Mex), a U.S. based shortline railroad that connects The
Kansas City Southern Railway Company (KCSR) with TFM, Mexico's largest railroad
by volume. The Mexrail shares will be placed in a voting trust pending
regulatory approval by the Surface Transportation Board (STB) of KCS's common
control of Tex-Mex, KCSR, and the Gateway Eastern Railway Company.
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Page 2 of 3
"KCS is very pleased to have completed the Mexrail transaction and to have it
before the STB again for approval," said Michael R. Haverty, Chairman, President
and CEO of Kansas City Southern. "Obtaining control of Mexrail and its
U.S.-based assets under KCS strengthens KCS as a viable rail competitor in the
cross-border market.
"Approval of the Mexrail transaction will make KCS, our TFM partner, a stronger
second U.S. rail carrier to the border at Laredo, and will be highly beneficial
for TMM," said Jose Serrano, Chairman and CEO of TMM. "We are pleased to have
completed this transaction."
Under the agreement, KCS has an exclusive option to purchase the remaining 49
percent of Mexrail through October 31, 2005, and an absolute obligation to
purchase those shares on or before October 31, 2005. KCS agrees to comply with
all prior STB rulings concerning the international bridge between Laredo and
Nuevo Laredo (the Bridge), and to operate the Bridge under the terms of the
applicable bridge agreements and protocols.
KCS's acquisition of control of Tex Mex is subject to the approval of the STB.
KCS had previously submitted an application to control Tex Mex, but that
proceeding was suspended by the STB on October 8, 2003, following TFM's
repurchase of the Mexrail shares from KCS under the terms of the April 2003
agreement. KCS has notified the STB of the new agreement and has requested the
STB to reinstate the procedural schedule and to move forward with its
consideration of KCS's application to control Tex Mex.
Headquartered in Mexico City, TMM is a Latin American multimodal transportation
company. Through its branch offices and network of subsidiary companies, TMM
provides a dynamic combination of ocean and land transportation services. TMM
also has a significant interest in TFM, S.A. de C.V., which operates Mexico's
Northeast railway and carries over 40 percent of the country's rail cargo. Visit
TMM's web site at http://www.grupotmm.com and TFM's web site at
http://www.tfm.com.mx. Both sites offer Spanish/English language options. Grupo
TMM is listed on the New York Stock Exchange under the symbol "TMM" and Mexico's
Bolsa Mexicana de Valores under the symbol "TMM A."
KCS is a transportation holding company that has railroad investments in the
United States, Mexico and Panama. Its primary holding in the United States is
The Kansas City Southern Railway Company. Headquartered in Kansas City,
Missouri, KCS serves customers in the central and south central regions of the
United States. KCS's rail holdings and investments are primary components of a
NAFTA Railway system that links the commercial and industrial centers of the
United States, Canada, and Mexico.
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Page 3 of 3
Included in this press release are certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such forward-looking
statements are based on the beliefs of TMM's and KCS's management as well as on
assumptions made. Actual results could differ materially from those included in
such forward-looking statements. Readers are cautioned that all forward-looking
statements involve risks and uncertainty. For additional information relating to
such risks and uncertainties, readers are urged to review TMM's and KCS's
respective filings and submissions with the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended.
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