U.S. shrinks Ally (Ally previously known
as GMAC and General Motors Corp.) stake
to 13.8 percent

By David Shepardson, The Detroit News
 
September 12, 2014 Washington—The U.S. Treasury said it sold another nearly 9 million shares in its Ally Financial stake, shrinking its remaining stake to 13.8 percent, and has begun the sale of its remaining shares.

The Treasury said it sold 8.89 million shares in the Detroit-based auto lender for $218.7 million under a trading plan announced in mid-August.

It holds 66.2 million remaining shares; at that pace, the government might not complete its exit for another seven months or so.

Ally stock is down 1.2 percent to $24.37, down $0.29, a share and still below its $25 IPO price.

The U.S. Treasury also said it will continue to sell Ally stock through a second pre-defined written trading plan—though the plans aren’t made public to prevent Wall Street traders from profiting from the government’s sales.

“Treasury’s sale of additional common stock continues our effort to wind down the investment in Ally and the Troubled Asset Relief Program (TARP),” said Chief Investment Officer Charmian Uy.

“The second trading plan will allow us to continue exiting the investment in a manner that balances speed of exit with maximizing the taxpayer’s return.”

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

Ally 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.

The sale that started in August marked Treasury’s first sale of Ally shares since Ally’s IPO in April.

Taxpayers have now recovered approximately $18 billion on the Ally investment, roughly $875 million more than the original $17.2 billion investment.

To date, taxpayers have recovered a total of $440 billion on TARP investments, including the sale of Treasury’s AIG shares, compared to $425.2 billion disbursed.

Treasury said there will be opportunities for smaller broker dealers, including women and minority-owned dealers, to participate in the sale of Treasury’s remaining Ally common shares pursuant to the plan.

Ally is the only bailout recipient that still faces government pay restrictions, which will lift when the government completely exits.