American Airlines is in advanced talks to hire Guggenheim Securities co-chairman Jim Millstein for advice on tapping a $50 billion industry reduction package available from the U.S. Treasury Division to cope with the coronavirus pandemic, people acquainted with the matter stated.
Millstein is one of Wall Street’s most seasoned debt restructuring bankers and from 2009 to 2011 was the lead architect of the Obama administration’s overhaul of certain financial companies the government had bailed out, along with insurance titan American International Group.
While American Airlines has stated it has not yet determined whether it will seek U.S. government aid, Millstein’s anticipated appointment signifies the largest U.S. airline is actively preparing for such a step and girding for talks with Treasury delegates.
Coronavirus aid legislation enacted last week provides as much as $25 billion in loans and mortgages for U.S. airways, which have suffered from an unparalleled decline in passengers, with a further $25 billion available in direct cash grants that would result in the U.S. authorities receiving ownership stakes in the firms.
Were Millstein to be hired, he would be advising American Airways on the form and phrases of aid it ought to pursue and methods to navigate the U.S. Treasury Department’s process for requesting the financial aid, the sources stated. The advice given to the Fort Worth, Texas-based firm would be done in his own capability, independent of Guggenheim, the sources added.
The sources warned that no decision on American Airlines accepting U.S. government support had yet been made and requested anonymity to discuss the confidential preparations.