Transportacion Maritima Mexicana Announces That TFM Has Concluded Negotiations To Refinance Bank Debt Obligations
20 September 2000
Transportacion Maritima Mexicana Announces That TFM Has Concluded Negotiations To Refinance Bank Debt Obligations
MEXICO CITY, Sept. 20 Transportacion Maritima Mexicana,
S.A. de C.V. , the largest Latin American multimodal
transportation, distribution, and logistics company announced that TFM, its
Mexican joint venture railroad (TFM, S.A de C.V.) has concluded negotiations
to refinance its senior secured bank credit facility. This action will bring
about reduction in overall costs. TMM owns a controlling interest in Grupo
TFM.
This negotiation will enable TFM to replace its Senior Secure Credit
Facility of approximately $285 million, at rates of average LIBOR plus 200
basis points, with $300 million in commercial paper. The refinancing would
eliminate principal payments on bank loans of approximately $90 million
annually over the next two years.
Mario Gonzalez, CFO of TFM, noted, "This refinancing will have several
benefits to both TFM and its partners. TFM will be able to take advantage of
short-term commercial paper options, including lower overall rates, while
waiting for the market to improve before refinancing our debt over a longer
period of time." Mario Mohar, CEO of TFM stated: "TFM's covenants are
improved, providing TFM more flexibility in its operations while sensibly
enhancing the ability to make dividend payments if so declared by the
shareholders." This new financing allows TFM to enter into a new stage where
it is no longer seen as a project financing, but as an ongoing successful
concern.
Jose Serrano, chairman and CEO of TMM said, "This is the first step in a
process which will allow TFM's partners to realize benefit from their
investment in TFM through the upstreaming of profits."
TFM's financial and operating performance has exceeded expectations, which
has made it possible to present a refinancing plan structured to reduce
long-term financial costs, improve TFM's return on capital by optimizing its
debt level, and provide significant benefit to TFM and its key owners,
including TMM, Kansas City Southern Industries, and the Mexican government.
Headquartered in Mexico City, TMM is Latin America's largest multimodal
transportation company. Through its branch offices and network alliance
companies, TMM provides a dynamic combination of logistics services. TMM also
has a controlling interest in Transportacion Ferroviaria Mexicana (TFM), which
operates Mexico's Northeast railway and carries over 40% of the country's rail
cargo. Visit TMM's web site at http://www.grupotmm.com and TFM's web site at
http://www.gtfm.com.mx both sites offer Spanish/English language options. For
free fax on demand information, dial 1-800-PRO-INFO and enter the company's
symbol: TMM.
Included in this report 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 the Company's management as well as on
assumptions made by and information currently available to the company at the
time such statements were made. Actual results could differ materially from
those included in such forward-looking statement. Investors are cautioned
that all forward-looking statements involved risks and uncertainty. These
risk factors and additional information are included in the company's reports
on Form 6-K and 20-F on file with the Securities and Exchange Commission.