A Resounding "No" to the TMM Sale

If the sale had gone through, the line would have been called the NAFTA Rail. The vote shocked the company and government officials.

The refusal by stockholders to sell comes at a difficult time for TMM, which last May defaulted on payment of $177 million on an American Depositary Receipts (ADR) loan.

TMM’s chairman, Jose Serrano Segovia, and KSC CEO, Michael Haverty, reacted with awe and disbelief. They have accepted the fact that the deal will not go through.

As the vote took place, the Mexican government’s Foreign Direct Investment Commission was about to green light the sale. The only remaining hurdle to the transaction was a suit by TMM against the government for an $880 million tax refund, which the government refuses to pay back. Now officials are disappointed and confused. An enormous amount of work by many different government departments had go into arranging the sale.

TMM has several open options to reconsider. However at the moment, they are back where they started on April 21, when they announced the deal. Now they’ll have to begin from scratch with their financial reengineering.

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