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FORMER CONTINENTAL EXECUTIVES BID $425 MILLION FOR AIRLINE

FORMER CONTINENTAL EXECUTIVES BID $425 MILLION FOR AIRLINE
    NEW YORK, Oct. 1 /PRNewswire/ -- Several former executives of Continental Airlines have banded together and today submitted a bid to acquire the airline for $425 million in cash, the highest bid so far, as part of an Employee Stock Ownership Plan (ESOP) whereby the airline's employees will own 52 percent of the stock of the company and the creditors will receive 40 percent.
    The bid was submitted by Benefit Concepts New York (BCNY) in conjunction with several of the airline's former executives, including a top airline executive whose name will be released at a later date. BCNY is one of the nation's leading firms in the design, installation, administration and financing of ESOPs.
    The BCNY offer calls for the establishment of the Continental Airlines Employees Service Corporation and is for $425 million in cash of which $25 million will be in equity and $400 million in ESOP debt. The ESOP will end up owning 52 percent of Continental's stock, the airline's unsecured creditors will receive 40 percent and the remaining 8 percent will be distributed among BCNY, the former Continental executives behind the bid, and existing senior management of Continental.
    BCNY is headed by Daniel E. Carpenter.  As one of the charter members of the ESOP Association, Mr. Carpenter is one of the nation's foremost authorities on ESOPs, has been an ESOP practitioner for over 15 years, and has worked on over 350 ESOPs and placed close to $1 billion in ESOP financing.
    Among the former Continental executives involved in the bid is Jack E. Robinson.  Mr. Robinson was recently president of Florida Air.  Prior to that he served as president of the commuter subsidiary of Eastern Airlines, vice president of corporate development at Eastern, and he has also held a variety of finance and strategic planning positions at Continental and its former parent company, Texas Air Corporation.
    Also involved with BCNY in the bid is Richard H. Allen, a former senior executive at Ogden Aviation Services and Continental.  Mr. Allen has almost 30 years of airline operations experience including numerous field and staff management positions with American Airlines.
    "Our bid is the highest and best offer because it provides the most cash to the estate and results in Continental's employees owning a majority of the airline," said Mr. Carpenter.  "The financial community loves the ESOP structure because of the 50 percent tax exclusion and the new Continental gets to deduct both principal and interest on the ESOP debt from taxes.  Finally, the creditors receive more stock under our offer than the others.  It's a win-win situation for everyone."
    Mr. Robinson added that "with our unique business plan and in-depth knowledge of Continental's operations and intrinsic competitive posture, the tremendous benefits of employee ownership through the ESOP can be leveraged to create a profitable and viable global carrier as we approach the 21st Century."
    BCNY also plans to enter into a strategic alliance with a large Asian carrier which would help Continental increase its Pacific Division market share.
    BCNY plans to discuss the details of its bid with advisers to Continental and the creditors' committee before the weekend and will argue at a bankruptcy court hearing in Delaware next Tuesday that its bid is the highest and best offer and should be approved.
    -0-             10/01/92
    CONTACT:  Peg Callanan of BCNY, 212-557-6500, ext. 141 CO:  BENEFIT CONCEPTS NEW YORK; CONTINENTAL AIRLINES IN:  AIR ST:  NY,TX -- NY013 -- X922  10/01/92
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Publication:PR Newswire
Date:Oct 1, 1992
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