US Treasury will sell $3 billion of Ally Financial shares

Article by Anita Panait, on January 18, 2014

The United States Treasury Department is planning to sell $3 billion of Ally Financial Inc. common stock, which would result to the reduction of the government’s stake in the company to 37 percent. In a statement, the Treasury said the US plans to sell 410,000 shares for $7,375 each in a private offering. After the sale, the US government would only have around 572,000 shares at the auto lender.

The statement said, that the YS government will cooperate with Ally to explore ways to further reduce its stake, including a public offering or an additional private sale of common shares.

“The strong investor interest is a testament to the significant transformation of the company,” Ally chief executive Michael A. Carpenter said in a separate statement. Ally won an approval from the Federal Reserve to become a bank holding company in December 2008, allowing it to tap a US bailout that amounted to $17.2 billion. As of November 20, 2013, the government owns 64 percent of Ally.

Citigroup Inc. and Bank of America Corp. are placement agents on the offering, according to the Treasury. Lazard Ltd. is serving as the Treasury’s financial adviser on the management and disposition of the stake. Once the sale is completed, the US will have recovered around $15.3 billion, or 89 percent, of the bailout fund it provided Ally as part of the Troubled Asset Relief Program. By then, the US will have recovered around $435.8 billion on all of its TARP investments, exceeding the $422.2 billion disbursed under the program, according to Treasury.

The bailout resulted to the government taking in a 74 percent stake at Ally. Ally started posting losses in 2007 that surged to $10.3 billion in 2009. Carpenter has wound down Ally’s mortgage operations and sold other assets. In December 2013, Ally was granted Fed approval to convert to financial holding company status to enable it to retain an insurance unit and SmartAuction Web site for dealers.

If you liked the article, share on:

Pin It

Comments

Recommended

Has Toyota started the production of a new electric supercharger? Well, a patent that was recently published indicated that they might have. And this electric supercharger looks more durable and...
by - March 27, 2017
The Tesla Model S has finally arrived in South Korean soil and is now available for test drive. But, there’s a catch. You’ll have to wait several months if you...
by - March 27, 2017
Sorry to say this to the Sport Quattro Concept fanatics. If you guys have been hoping for the production of this iconic concept to begin, prepare for your dreams to...
by - March 27, 2017
South Korean car company SsangYong recently revealed sketches of their upcoming SUV. We’re not always impressed by Korean car designs, but this one looks quite promising. Yup, it is the...
by - March 26, 2017
Twenty-eight years after the company was first launched by Toyota, which was initially targeted to the United States market only, Lexus has already made its way to over 70 countries....
by - March 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries