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:

Comments

Login or Create new account to add a comment!

Recommended

Nearly all details have been set with regards to the upcoming market introduction of the new Jaguar I-Pace. Its production version was recently previewed at the 2016 Los Angeles Auto...
by - December 8, 2016
WM Motor, a new China-based automaker, recently revealed its forthcoming lineup consisting of affordable electric vehicles. While there is a company is the U.S. that has the same name, they...
by - December 8, 2016
Even when Aston Martin has been mum about the upcoming AM-RB 001 hypercar, Marek Reichman at least has something new to say. In a recent interview with Australia’s Motoring, the...
by - December 8, 2016
The people at Mercedes-Benz are rejoicing. This is simply because for the first time since 1979, Mercedes-Benz has assembled 20,000 – and still counting – examples of the Mercedes-Benz G-Class....
by - December 8, 2016
When Donkervoort Automobielen BV unveiled its Donkervoort D8 GTO-RS limited edition in May 2016, customer interest has been so overwhelming that the Lelystad, Netherlands-based carmaker sold out this one-of-a-kind vehicle...
by - December 8, 2016
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