The efforts made by American automotive giant GM to get to a point when it can continue operating with low or no debt are intensifying in the US, after the car maker announced today the beginning of its exit from Ally Financial, formerly known as GMAC.
The car maker revealed that it was selling all of its shares of Fixed Rate Perpetual Preferred Stock, Series A of Ally Financial for a total of $1.0 billion. The transaction, underwritten by Credit Suisse, BofA Merrill Lynch, Deutsche Bank Securities and Barclays Capital, will close in the following days and will bring GM in the first quarter balance sheet an extra $300 million. The sale of the shares will also reduce GM's involvement in Ally to 9.9 percent in common stock.
“Today, we are taking another step forward in our strategy to strengthen and simplify the company’s balance sheet,” said Chris Liddell, still the vice chairman and chief financial officer of the American group.
Ally, who officially received this name in July last year, is now trying to bring back the past glory of GMAC and rebuild what once was an auto financing empire. The group is currently handling the financing operations for GM, Chrysler, Saab, Thor Industries and Fiat Mexico.
As was the case with GM itself, GMAC, as Ally was called, needed some cash flow infusion in 2009. The US government now holds the majority control of the financial company, but will try to rid itself of Ally later this year, when an initial public offering is expected to be made.
The car maker revealed that it was selling all of its shares of Fixed Rate Perpetual Preferred Stock, Series A of Ally Financial for a total of $1.0 billion. The transaction, underwritten by Credit Suisse, BofA Merrill Lynch, Deutsche Bank Securities and Barclays Capital, will close in the following days and will bring GM in the first quarter balance sheet an extra $300 million. The sale of the shares will also reduce GM's involvement in Ally to 9.9 percent in common stock.
“Today, we are taking another step forward in our strategy to strengthen and simplify the company’s balance sheet,” said Chris Liddell, still the vice chairman and chief financial officer of the American group.
Ally, who officially received this name in July last year, is now trying to bring back the past glory of GMAC and rebuild what once was an auto financing empire. The group is currently handling the financing operations for GM, Chrysler, Saab, Thor Industries and Fiat Mexico.
As was the case with GM itself, GMAC, as Ally was called, needed some cash flow infusion in 2009. The US government now holds the majority control of the financial company, but will try to rid itself of Ally later this year, when an initial public offering is expected to be made.