Tuesday, August 31, 2010

PEU Related ERRP Recipients

Uncle Sam opened his wallet for corporations, unions, schools, municipalities and health care companies. The government has $5 billion for its Early Retiree Reinsurance Program (ERRP). I blogged my hometown and household names getting their share of the federal pie. In reviewing the list of recipients, I noticed firms owned by private equity underwriters (PEU's).

Several Carlyle Group affiliates made the list:

John Maneely
The Hertz Corporation

Two of the three, ARINC and Hertz, are on the sell/take public list. John Maneely's sale to a Russian firm died in the financial meltdown.

Other Carlyle affiliates could benefit via union ERRP participation. Allison Transmission, Vought Aircraft and UCI have union agreements. Carlyle sold Vought to Triumph but its founders hold 5 million Triumph shares worth over $350 million. The Carlyle Group is shopping UCI.

KKR's recipients include:

Energy Future Holdings
Eastman Kodak

San Angelo's federal contribution for retiree health care could be as high as $815,000 over a two year period. How might PEU affiliates compare? Could ERRP help Carlyle or KKR get a higher return on equity? If so, it would make the PEU boys happy.