Previously, KCS had an agreement in place with the Mexican railroad to purchase its northeastern line, and market the connection as NAFTA Rail. At the eleventh hour, more than 99% of TMM shareholders voted against the sale, throwing cold water on both TMM's chairman Jose Serrano Segovia and KSC CEO Michael Haverty.
The sequence of events runs like this: On August 23, TMM told KCS it was terminating their Acquisition Agreement.
On August 29, KCS gave TMM a Notice of Dispute as stated in the Acquisition Agreement. KCS' position is there is no stipulation that a negative shareholder vote means termination of the Agreement.
On September 2, KCS filed a suit in Delaware, seeking to maintain the status quo for both parties until the issue is settled. In the suit, KCS also states that the Agreement remains in effect until December 31, 2004.
From now until December 31, 2004, another TMM stockholder vote could extend approval rather than the present disapproval.
Stay tuned.
