The U.S Treasury said Thursday it plans to sell another $3 billion in stock in Ally Financial Inc., the Detroit-based auto lender that was saved by a series of government bailouts.
The sale of 410,000 shares of Ally stock in a private offering at $7,375 per share expected to be completed Thursday will shrink taxpayers’ stake to 37 percent from about 65 percent.
The move is a big step in the government exiting its final investment as part of the $85 billion auto bailout.
Taxpayers will have recovered approximately $15.3 billion, or 89 percent of the $17.2 billion investment provided to Ally during the financial crisis, the government said.
“Treasury will continue to work with the company to further wind down this investment through either a public offering, private sale of its common shares, or other alternatives,” the department said.
Ally CEO Michael Carpenter called the sale a “very positive outcome for Ally and for the U.S. taxpayer, and the strong investor interest is a testament to the significant transformation of the company.”
Last month, General Motors Co. sold its 8.5 percent stake in Ally — its former in-house lending arm that was known as GMAC — for about $900 million.
A big hurdle to the government exit from Ally had been the bankruptcy of Ally’s Residential Capital mortgage unit, which was resolved last month.
The Federal Reserve informed Ally in November it didn’t object to the company’s revised capital plan. The Federal Reserve has required bank-holding companies to show they have enough capital on hand in the case of a major financial downturn.
During the financial crisis, the Treasury tapped Ally to provide financing for GM and Chrysler Group LLC dealers and customers. That arrangement for Chrysler dealers expired April 30. Ally has sold off much of its international operations to focus on its U.S. auto lending.