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DOT APPROVES AIR CANADA/AIR PARTNERS INVESTMENT IN CONTINENTAL AIRLINES

 WASHINGTON, Jan. 7 /PRNewswire/ -- The U.S. Department of Transportation has approved a proposed $450 million investment by Air Canada and Air Partners of Dallas in Continental Airlines, Secretary of Transportation Andrew H. Card Jr. announced today.
 In a letter to the airline's counsel, the department said that under the proposed investment agreement and reorganization plan, the reorganized Continental would continue to meet the legal standards to operate air service and would continue to be controlled by U.S. citizens.
 Card said, "This finding reaffirms the Bush administration's openness to foreign investment in U.S. airlines. The investment would strengthen Continental and help it to continue its excellent service to the flying public."
 Under the agreement, Air Partners, a limited partnership formed by David Bonderman and James Coulter of Dallas, would invest $215 million in Continental, and Air Canada would invest $235 million -- $30 million of that for nonvoting, preferred stock. Air Canada would acquire 27.5 percent of the total equity and 24 percent of the voting stock in the reorganized company. Air Partners would own 27.5 percent of total equity and 41 percent of the voting stock. Air Canada and Air Partners each will select six members of Continental's 18-member board of directors.
 The investment agreement contemplated a number of super-majority voting provisions, but Continental and the Air Canada/Air Partners investment group, after consultation with the department, has agreed to eliminate those that raised DOT concerns about possible control by Air Canada.
 The proposed reorganization plan and investment agreement are subject to the review and approval of the bankruptcy court. In December 1990, Continental filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. On Nov. 9, 1992, the Continental board accepted the investment offer of a group composed of Air Canada and Air Partners.
 -0- 1/7/93
 /CONTACT: Ed O'Hara of the U.S. Department of Transportation, 202-366-5571/


CO: U.S. Department of Transportation; Air Canada; Air Partners;
 Continental Airlines ST: District of Columbia, Texas IN: AIR SU: EXE


DC -- DC009 -- 2576 01/07/93 10:27 EST
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Publication:PR Newswire
Date:Jan 7, 1993
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