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UPDATE 1-GM selling remaining Ally stake -report
December 4, 2013 / 7:11 PM / 4 years ago

UPDATE 1-GM selling remaining Ally stake -report

DETROIT, Dec 4 (Reuters) - General Motors Co is selling its remaining stake in its former lending arm, Ally Financial Inc, the Wall Street Journal reported on Wednesday.

The private placement deal is worth about $900 million, the newspaper said, citing people familiar with the matter.

Officials with GM and Ally declined to comment. GM which owned a 9.9 percent stake in Ally at the end of September.

Once a part of GM, Ally was formerly known as GMAC. GM has been rebuilding its finance operations since selling a controlling stake in GMAC to private equity firm Cerberus Capital Management in 2006.

In November 2012, GM agreed to pay $4.2 billion for Ally’s European and Latin American auto lending operations as it moved to expand its in-house financing at its GM Financial unit as a way to boost sales. GM closed on those deals in April and October this year.

Last month, Ally bought back $5.9 billion worth of its shares from the U.S. Treasury and has repaid more than 70 percent of the total aid provided by the government.

Ally received a $17.2 billion bailout during the financial crisis. Last month, the Federal Reserve approved the company’s 2013 capital plan, clearing the way for repayment to Treasury.

Ally has struggled to recover from the mortgage meltdown. Last year, it put its troubled home loan subsidiary Residential Capital LLC into bankruptcy to stanch the bleeding from bad mortgages.

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