Treasury Secretary Steven Mnuchin has indicated that the U.S. government will take equity stakes in airline companies in exchange for billions in direct grants, the Wall Street Journal reports, citing people familiar with the matter.
Mnuchin reportedly detailed his plans during intense last-minute negotiations over the coronavirus rescue bill currently making its way through Congress.
The Journal reports:
The version of the legislation that passed the Senate on Wednesday night would provide $25 billion in loans and guarantees to passenger airlines, with the remaining $25 billion in the form of direct grants, meeting the requests of the airlines. Airlines had wanted outright grants, last week proposing a $50 billion assistance package, with half of that paid in direct grants to provide the cash that many carriers need right away in order to avoid furloughs and pay cuts.
Legislation that cleared the Senate details the forms of investment that the Treasury secretary may make in connection with the grants, listing warrants, options, preferred stock, debt securities, notes or other financial instruments to "provide appropriate compensation" to the federal government for the provision of financial assistance.