KC Southern-TMM Proposal Would Create Nafta Rail System

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ailroad holding company Kansas City Southern said it would spend $200 million in cash and stock to create a unified rail network that could haul freight from Mexico City to St. Louis.

It would use the money to buy most of TFM, the major freight railroad in northeastern Mexico, from financially troubled Grupo TMM, which will soon have to make a major payment to bondholders.

Under the plan, KCS would combine its Kansas City Southern Railway Co. with TFM and the Texas Mexican Railway Co. to create Nafta Rail. It would be a company traded on the New York Stock Exchange, except for the 22% that would belong to Grupo TMM.



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