According to a Wall Street Journal report, GM is selling its remaining stake in its former lending arm, Ally Financial Inc.
Officials with GM and Ally declined to comment. GM owned a 9.9 % stake in Ally at the end of September. The private placement deal is worth about $900 million, the newspaper said, citing people familiar with the matter.
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.
by Aurel Niculescu
) - Thursday, December 5th, 2013 - filed under General Motors
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