Continental Airlines Seeking Help From Business Group to Raise Capital
Continental Airlines Holdings Inc. has asked a large Houston business group to help it raise capital from local investors, says Chairman Hollis L. Harris.
The company, operating under Chapter 11 bankruptcy protection, is trying to raise $550 million to help it expand, Harris said.
Harris is a member of the Greater Houston Partnership, the city’s largest business group. He met with other board members about two weeks ago to discuss how local investors could invest in the airline. More recently, he met with the group’s aviation committee.
The airline is seeking a $250-million line of credit and $300 million in investment capital. The capital, which probably would be raised through a stock sale, would be used to buy equipment, acquire new routes, spruce up terminals and paint planes, said Continental spokesman Art Kent.
Bankers Trust and Chase Manhattan Bank have tentatively agreed to lend Continental between $120 million and $140 million.
Kent said the Greater Houston Partnership meetings have been informal and no negotiations are under way.
On Tuesday, Continental will request a four-month extension of the deadline for filing its Chapter 11 reorganization plan.
It has been meeting with its creditors and investment bankers, Kent said. He declined to elaborate.
The airline is also renegotiating its leases to cut operating costs, discussing the sale of all or part of its stake in Air Micronesia and discussing the sale of its Houston in-flight meals operation, Chelsea Catering Co.