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 The Treasury said it expected taxpayers to recover about $3 billion
from the private offering of Ally common stock at $7,375 per share.
The sale would reduce the government's stake to 37 percent, it said.
The government pumped $17.2 billion into Ally during the 2007-2009
financial crisis, and the Treasury said taxpayers will have
recovered about $15.3 billion once the stock sale was complete.
The offering could also leave the Treasury just a few billion short
on the investments it made to prop up lenders, automakers and the
housing sector from its crisis-era $700 billion Troubled Asset
Relief Program.
Private market investors appear to be optimistic about Ally's
prospects. Ally sold $1.3 billion in unlisted shares to private
investors in November for an average price of around $6,000 per
share, and weeks later GM sold its remaining 8.5 percent stake in
Ally for around $6,800 per share.
The appetite for Ally shares from private investors suggests the
government might be able to fully exit its stake this year.
Ally Chief Executive Officer Michael Carpenter said the company in
the fourth quarter of 2013 had completed a series of strategic
actions that included raising common equity, reaching a settlement
with the U.S. Consumer Financial Protection Bureau and the
Department of Justice and being granted financial holding company
status.
"These actions, coupled with the strength of our ongoing business,
position Ally to complete its plans to exit TARP and to continue to
build upon our thriving franchises," Carpenter said in a statement.
"This is 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."
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In announcing its offering, the Treasury said it would work with
Ally to further reduce the government's investment through either a
public offering, private sale of its common shares or other
alternatives.
If the Treasury sold its remaining 571,971 shares at the same price
as the current offering, it would raise a further $4.2 billion and
put TARP into the black.
Ally has been hoping to go public since at least 2011, but investors
had remained worried about the problems that forced it to seek a
taxpayer bailout, which included bad home loans at its Residential
Capital subprime mortgage unit.
That unit is now getting ready to emerge from bankruptcy.
(Reporting by Timothy Ahmann and Elvina
Nawaguna; editing by Paul Simao)
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