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The private sale of common shares will dilute the government's stake in Ally from the current 74 percent to around 65 percent, Proia said. Other Ally shareholders include private equity firm Cerberus Capital Management at 9 percent, a trust for General Motors at 10 percent and some smaller investors. Ally has been preparing to repay the government for the past year, amassing cash by selling assets outside the U.S. In November, GM Financial, General Motors' new financial arm, bought Ally's European, Chinese and Latin American auto financing operations for $4.25 billion. A month before that, Ally sold its Canadian operations to the Royal Bank of Canada for $4.1 billion and a Mexican insurance business for $865 million, giving it about $9 billion in cash. In May, Ally cut ties to its troubled mortgage lending and servicing subsidiary Residential Capital LLC, or ResCap, when the subsidiary filed for bankruptcy protection. Toxic mortgages made by ResCap caused most of Ally's financial problems. ResCap has since accepted a $3 billion buyout offer from a unit of Ocwen Financial Corp. Also in the SEC filing are details of who would appoint members to Ally's board of directors as stock changes hands. The government, which now appoints six of 11 directors, will gradually lose seats as it divests itself of Ally shares. Proia and Treasury Department spokesman Adam Hodge wouldn't comment on whether the government plans a gradual sale of the shares instead of an IPO. "The IPO continues to be a viable option," Proia said. "We can't comment any further at this point."
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