General Motors sells Ally stake for $900 million

Thu Dec 12, 2013 12:52pm EST

Dec 12 (Reuters) - General Motors Co has sold its remaining 8.5 percent stake in Ally Financial Inc, its former auto finance arm, for $900 million, the carmaker said on Thursday.

GM said the transaction will result in a $500 million gain to be treated as a special item in the fourth quarter.

The identity of the buyers of the unlisted Ally shares was not immediately known. A GM spokesman declined to disclose who purchased the stake.

Ally, formerly known as GMAC, was a unit of GM until private equity firm Cerberus Capital Management bought a majority stake in the lender in 2006. Burned by bad mortgages that its subsidiary Residential Capital made during the housing bubble, Ally later received a $17.2 billion federal bailout.

Ally has taken steps to streamline operations since then, including selling many of its international businesses.

In November, Ally sold $1.3 billion of unlisted shares to a group of investors, a transaction that helped enable the bank to make a $5.9 billion payment to the U.S. Treasury, which still has majority ownership.. Ally has repaid around 70 percent of the taxpayer funds it had received.

News of the sale comes a day after a federal judge approved the bankruptcy exit plan of ResCap, Ally's home loan subsidiary, which declared bankruptcy in 2012 to limit the damage from ongoing mortgage woes.