The Treasury Department announced yesterday that it will loan $700 million to a trucking firm that ships military equipment, in exchange for having U.S. taxpayers acquire an almost 30 percent stake in the company, the Washington Post reported. Under the unusual arrangement, the Treasury Department will provide the emergency loan to YRC Worldwide, while taking a 29.6 percent equity stake in the company. The U.S. government does not typically take ownership stakes in companies but was given permission to do so by Congress as a way to ensure taxpayer funds are not misspent. The deal is the first under a $17 billion loan program approved as part of the broader stimulus by Congress in March. That pot of money was earmarked for firms deemed “critical” to U.S. national security. Congress gave Treasury the authority to approve more than $500 billion in emergency loans to companies and cities, although most of that money has not been disbursed. “We are pleased for Treasury to make this loan pursuant to the CARES Act,” Secretary Steven Mnuchin said. “This loan will enable a critical vendor to the Department of Defense to maintain significant employment while providing appropriate compensation to taxpayers.” YRC Worldwide is a publicly traded company headquartered in Kansas. With a fleet of about 7,600 tractors and 30,000 trailers, YRC is one of the largest “less-than-truckload” transportation companies in North America. The 96-year-old company covers 68 percent of the military’s services in that area, according to the Treasury Department’s announcement.
