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CONTINENTAL ACCEPTS AIR CANADA/AIR PARTNERS BID

 CONTINENTAL ACCEPTS AIR CANADA/AIR PARTNERS BID
 NEW YORK, Nov. 9 /PRNewswire/ -- Continental Airlines today


announced that its board of directors has unanimously voted to accept the Air Canada/Air Partners, L.P. investor group's bid to invest $450 million cash in Continental upon its emergence from bankruptcy.
 The parties expect that Continental will emerge from Chapter 11 in early 1993.
 Robert R. Ferguson III, vice-chairman and chief executive officer of Continental said, "This is a major milestone for Continental. We have come a long way thanks to the hard work and commitment of our employees, and the cooperation of our creditors. This is the first of several possible alliances that will enable Continental to establish its global presence in the future.
 "We look forward to our new working relationship with Air Canada and Air Partners, and are delighted we will have the funds available to emerge from Chapter 11 and to finance the improvements we intend to make in Continental to make it a premier service airline," Ferguson added.
 The investment includes $140 million of new equity, $110 million of which will be in common stock (divided equally between Air Canada and Air Partners). In addition, Air Canada will purchase $30 million of non-voting preferred stock at a dividend rate not to exceed 12 percent. Air Canada will also purchase $150 million of Series B debt securities which will be secured by certain unencumbered assets of Continental. Air Partners intends to arrange for the purchase of $160 million of Series A debt securities backed by the assets of Continental Micronesia, Inc. Initially, Air Canada and Air Partners will each purchase 27.5 percent of the equity in a revitalized Continental. Air Canada will have 24 percent of the voting stock and Air Partners will have 41 percent of the voting stock. Air Canada and Air Partners will also receive warrants allowing them to increase their economic ownership in the future. In addition the unsecured creditors will initially receive 35.6 percent of the equity of the company upon its reorganization.
 The Committee of Unsecured Creditors enthusiastically supports this transaction. Randall Kominsky and Chris Matthews, co-chairmen of the Committee, said, "This transaction provides the unsecured creditors of Continental Airlines with a substantial minority stake in the airline as well as significant representation on Continental's board. Our equity interest in Continental is strengthened by the cash infusion this investment provides and the plans Continental has to improve its service in the future."
 Hollis L. Harris, vice-chairman, president and chief executive officer of Air Canada said, "We are thrilled with this decision. Our investment in Continental is an important component of our corporate strategy to develop a global network of airlines. Most important, the synergies between Air Canada and Continental, along with Continental's extensive route structure, will assist both carriers to achieve a prominent position in the worldwide airline industry. In addition, we expect to further strengthen Continental's position in a global airline network by working, subject to any necessary approvals, to create mutually beneficial synergies between the strategic partners of Continental and Air Canada."
 David Bonderman, partner in Air Partners said, "We are pleased with the board's decision and we look forward to finalizing the transaction expeditiously. We believe the Air Canada/Air Partners offer will provide substantial immediate and long-term benefits to Continental's customers, employees, suppliers, and creditors. We look forward to working with management to complete the restructuring and to make a Houston-based Continental a strong, long-term competitor. We appreciate the fact that Continental's cost efficiencies and dedicated workforce position the carrier for a successful emergence from bankruptcy."
 Continental will finalize its disclosure statement and reorganization plan, based on the Air Canada/Air Partners investment, for submittal to the U.S. Bankruptcy Court in Wilmington, Del., this month. The transaction is subject to certain regulatory reviews, including the U.S. Department of Transportation, and to confirmation of the plan of reorganization.
 Continental and Continental Express operate more than 2,000 daily departures to 192 worldwide destinations. The Houston-based carrier has 42,000 employees and operates a fleet of 420 aircraft.
 Air Canada is a publicly traded company, headquartered in Montreal, serving 117 destinations via its domestic, international and connecting networks. It currently operates 102 aircraft and has 20,000 employees.
 Air Partners is a Fort Worth, Texas-based investment partnership led by David Bonderman and James Coulter.
 -0- 11/9/92 R
 /CONTACT: Continental Airlines corporate communications, 212-704-8979, or Denis Couture, 514-422-5921, or Owen Blicksilver, 212-546-2240, both of Air Canada/ CO: Continental Airlines; Air Canada/Air Partners, L.P. ST: New York IN: AIR SU:


GK -- NY010R -- 8759 11/09/92 13:53 EST
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Date:Nov 9, 1992
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