General Motors on Tuesday announced plans to sell all of its preferred shares in Ally Financial, its former lending arm, in a $1 billion offering. þþAfter the transaction, in which G.M. expects to make a $300 million profit on the investment in the first quarter, the company said it would be left holding 9.9 percent of Ally’s common stock. þþ“Today, we are taking another step forward in our strategy to strengthen and simplify the company’s balance sheet,” said Chris Liddell, vice chairman and chief financial officer of G.M. þþDuring the financial crisis, G.M. and Ally Financial — known at the time as GMAC — ran into trouble, requiring a huge government bailout. G.M. moved to begin repaying its bailout in November through a record public offering. Ally is expected to undertake its own offering sometime this year.þþThe G.M. offering of Ally’s preferred shares was underwritten by Credit Suisse, Bank of America Merrill Lynch, Deutsche Bank and Barclays Capital. None of the four financial institutions were chosen to lead either General Motors’ offering or the eventual offering of Ally Financial. þþBoth Bank of America Merrill Lynch and Deutsche Bank were involved in the stock offerings of the American International Group, the troubled insurer that also received a huge bailout from the government.þ
Source: NY Times
