American Airlines Group Inc (AAL.O) is in advanced talks to hire Guggenheim Securities co-chairman James Millstein for advice on tapping a $50 billion industry relief package available from the U.S. Treasury Department to cope with the coronavirus pandemic, people familiar with the matter said, APA reports citing Reuters.
Millstein is one of Wall Street’s most seasoned debt restructuring bankers and from 2009 to 2011 was the chief architect of the Obama administration’s overhaul of certain financial firms the government had bailed out, including insurance giant American International Group Inc (AIG.N).
While American Airlines has said it has not yet decided whether it will seek U.S. government aid, Millstein’s anticipated appointment indicates the largest U.S. airline is actively preparing for such a move and girding for negotiations with Treasury officials.
Coronavirus relief legislation enacted last week provides up to $25 billion in loans and loan guarantees for U.S. airlines that have suffered from an unprecedented decline in passengers, with an additional $25 billion available in direct cash grants that could result in the U.S. government receiving ownership stakes in the companies.
Were Millstein to be hired, he would be advising American Airlines on the form and terms of aid it should pursue and how to navigate the U.S. Treasury Department’s process for requesting the financial assistance, the sources said. Advice given to the Fort Worth, Texas-based company would be done in his own capacity, independent of Guggenheim, the sources added.