1 LINKEDINCOMMENTMORE

The U.S. Treasury said it sold another 11.2 million shares of Ally Financial, shrinking its remaining stake to 11.4 percent, and has begun the sale of its remaining shares.

The Treasury said the latest sale in the Detroit-based auto lender raised $245.5 million under a trading plan announced in September. It still has 54.9 million shares; at that pace, the government might not complete its exit for another four or five months. Treasury hasn’t yet announced a new trading plan.

Ally shares rose 4 percent in early trading to $21.89, up $0.84 a share — and still below its $25 IPO price.

Treasury — which gave the auto lender $17.2 billion in total bailouts in 2008 and 2009 — is working to completely exit.

Ally has said the government could exit by year's end. It would mark an end to the government's $85 billion auto bailout and a historic period of intervention to rescue the U.S. auto industry.

As part of Ally's initial public offering in April, Treasury sold 95 million shares of Ally common stock at $25 per share for $2.375 billion dollars in proceeds to taxpayers. The underwriters of the IPO later exercised their option to purchase 7.25 million additional shares at the IPO price, recovering an additional $181 million for taxpayers.

Taxpayers have now recovered about $18.3 billion on the Ally investment, roughly $1.1 billion more than the original $17.2 billion in bailouts for Ally.

To date, taxpayers have recovered a total of $440.3 billion on TARP investments, including the sale of Treasury's AIG shares, compared to $425.2 billion disbursed.

Ally, previously known as GMAC and General Motors Corp.'s in-house lending arm, sold off most of its international lending operations to GM. It will report third quarter earnings on Oct. 29.

Ally reported second quarter net income of $323 million, with Ally saying results reflecting “continued strong lease performance and favorable credit trends.” New auto lending was $10.9 billion, up from $9.2 billion in the first quarter and $9.8 billion in the same period last year.

DShepardson@detroitnews.com

1 LINKEDINCOMMENTMORE
Read or Share this story: http://detne.ws/1waHSmo