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

Recommended

We’re willing to bet that the Bentley Bentayga is not the first thing that comes to mind for most people who are into off-roading and outdoor activities. It just doesn’t...
by - November 23, 2017
The other day, it was confirmed that Volvo will finally bring the XC40 to US soil, where it will first make an appearance at the 2017 Los Angeles Auto Show....
by - November 23, 2017
There is no question that the new BMW M5 (F90) high performance sports sedan is more powerful, faster and more enticing than the previous model. But for interested customers in...
by - November 23, 2017
Following the Tesla Roadster’s electrifying revelation on Thursday, Musk’s highly ambitious goals have skyrocketed when he tweeted about his future plans for the new sports car. Well, kind of. The...
by - November 23, 2017
Earlier in November at the 2017 SEMA Show in Vegas is when Hennessey unwrapped the Venom F5 to all of us. But it was actually first introduced as a concept...
by - November 22, 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