HOUSTON, April 17 /PRNewswire-FirstCall/—Continental Airlines
(NYSE: CAL) today announced that the initial public offering of
30,000,000 shares of common stock of its wholly owned subsidiary, ExpressJet
Holdings, Inc. (ExpressJet), was priced at $16.00 per share. Closing of the
offering is expected to occur on April 23, 2002, subject to customary closing
conditions. ExpressJet indirectly owns ExpressJet Airlines, Inc., the
regional airline that operates as Continental Express.
In the initial public offering, ExpressJet expects to sell
10,000,000 shares of its common stock and use the estimated net proceeds to
ExpressJet of $147 million to repay a portion of its indebtedness to
Continental Airlines. In addition, Continental Airlines expects to sell
20,000,000 of its shares of ExpressJet common stock in the offering and has
granted the underwriters an option to purchase an additional 4,500,000 shares
to cover over-allotments. Continental Airlines intends to use $150 million of
the $300 million of estimated net proceeds to Continental Airlines
($367 million if the entire over-allotment option is exercised) to fund a
portion of its obligations to the Continental pension plan for its employees,
and to use the remainder of the proceeds for general corporate purposes.
Following the offering, Continental Airlines` ownership of ExpressJet will
fall to 53.1 percent, or further if the underwriters exercise their over-
allotment option, down to 46.1 percent if the entire over-allotment option is
exercised. Continental Airlines currently does not intend to remain a
stockholder of ExpressJet over the long term. Following the expiration of the
180-day lock-up period that it has agreed to in connection with the offering,
Continental Airlines will likely sell some or all of its shares of ExpressJet
common stock, subject to market conditions.
A registration statement relating to the ExpressJet securities has been
declared effective by the Securities and Exchange Commission. This press
release shall not constitute an offer to sell or a solicitation of an offer to
buy, nor shall there be any sale of the ExpressJet securities in any state in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state. The offering
will be made only by means of a prospectus.
The terms “expects to” and “intends to” identify forward-looking
statements as defined by federal securities laws. The proposed offering is
subject to a number of conditions and approvals and there can be no assurance
that an offering will be completed as described.
Continental Airlines is the fifth largest airline in the U.S., offering
more than 2,100 departures daily to 120 domestic and 91 international
destinations. Operating hubs in New York, Houston, Cleveland and Guam,
Continental serves more international cities than any other U.S. carrier,
including extensive service throughout the Americas, Europe and Asia. For
more information, visit continental.com .