INVESTOR GROUP REPORTEDLY NEAR DEAL TO PURCHASE CONTINENTAL AIRLINES

INVESTOR GROUP REPORTEDLY NEAR DEAL TO PURCHASE CONTINENTAL AIRLINES

An investor group led by Maxxam Inc. Chairman Charles Hurwitz is "very close" to an agreement with Continental Airlines and its creditors to buy the financially troubled carrier, the Houston Post said Monday.

In a copyrighted story quoting unnamed sources, the newspaper said Mr. Hurwitz has submitted a proposal to management and creditors to buy a majority interest in the airline, which is the main unit of Continental Airlines Holdings.The newspaper quotes industry sources as saying a controlling interest in the airline would cost at least $250 million.

News reports surfaced last November that Mr. Hurwitz was interested in Continental, but neither Maxxam nor Continental would comment.

Continental has been in Chapter 11 bankruptcy, protected by a court from its creditors, since December 1990, and for much of that time said it was seeking an outside investor or merger to provide much-needed cash.

But on Feb. 6, the Houston-based airline filed a proposed financial reorganization plan with the bankruptcy court, which called for it to emerge

from Chapter 11 without outside help.

The plan essentially would trade debt for equity in the company.

Spokesmen for Continental and Maxxam, which is also based in Houston, were not available for comment.

The paper did not say who besides Hurwitz was in the investor group making the offer for Continental. Maxxam is a diversified holding company, which owns Kaiser Aluminum Corp, Pacific Lumber Corp and a number of real estate ventures.

A Hurwitz deal for Continental would require the approval of creditors and the bankruptcy court.