Investment

Mnuchin Says Next U.S. Treasury Secretary Should Sell $ 700 Million YRC Loan

WASHINGTON (Reuters) – U.S. Treasury Secretary Steven Mnuchin said on Thursday he would recommend his successor consider next year selling off the $ 700 million emergency government loan to the trucking company YRC Worldwide at a profit for the taxpayer.

FILE PHOTO: US Treasury Secretary Steve Mnuchin watches before testifying before the US House selection subcommittee on the coronavirus crisis on the Trump administration’s response to the country’s economic crisis , on Capitol Hill in Washington, DC, USA on September 1, 2020. Graeme Jennings / Pool via REUTERS / File Photo

Mnuchin, speaking to a congressional oversight committee on federal coronavirus assistance programs, said the loan to YRC, which transports goods for the Defense Department, “was a risky loan.”

“We have been fortunate that the economy has recovered and equity is doing well and I will recommend that next year the Secretary of the Treasury seriously consider selling this loan and recovering what I believe is a benefit to taxpayers because it was a success, ”Mnuchin said.

The $ 700 million loan to YRC, which posted a net loss of $ 104 million in 2019, was accompanied by a 30% stake in the trucking company.

It was the largest and most controversial of 11 loans made from a $ 17 billion coronavirus rescue fund that was originally intended to bail out large defense contractors such as Boeing Co and General Electric Co .

Mnuchin has since closed the program to new loans and is calling on Congress to reallocate unused funds to help small businesses, municipalities, individuals and schools.

Members of the bipartisan Congressional Oversight Committee established under the $ 2,000 billion CARES Act scolded Mnuchin over the decision to grant the loan to YRC, a company that has frequently encountered financial difficulties.

Mnuchin, who has not publicly acknowledged that he will be replaced by President-elect Joe Biden’s Treasury candidate Janet Yellen, said the Treasury made the loan to protect Defense Department operations and to protect thousands of jobs that would be lost if the business failed.

Mnuchin added that if he was still in charge of his old bank, OneWest, he would have rejected YRC’s request as a business loan. “But as you remember, Congress and outsiders encouraged us to take losses,” he said.

YRC shares were trading at $ 5.50 on Thursday, down from $ 1.85 on June 30, the day before the Treasury loan announcement.

Commission member Bharat Ramamurti, lawyer and former Democratic Senate aide, also asked Mnuchin if he knew that one of YRC’s biggest creditors, Apollo Global Management, had “close personal ties” to the adviser. from the White House Jared Kushner, including $ 184 million. loan to Kushner companies.

Kushner is President Donald Trump’s son-in-law.

Mnuchin said he was not directly aware of this and did not take it into account when approving the loan. He added that neither Kushner nor any Kushner staff had contacted Mnuchin about a loan to YRC.

Report by David Lawder in Washington; Editing by Diane Craft and Matthew Lewis

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