UPDATED: 12/4/13 2:38 pm ET - clarifies details
DETROIT (Bloomberg) -- General Motors Co. is planning to sell its stake in Ally Financial Inc., the auto lender majority owned by U.S. taxpayers, a person with knowledge of the transaction told Bloomberg.
Selling now would allow GM to avoid a months-long lockup tied to Ally’s initial public offering, according to the person, who asked to remain anonymous because the deal isn’t public. The automaker also may seek to tap demand for Ally’s shares after the lender’s private placement that raised $1.3 billion earlier this year was oversubscribed, the person said. That deal diluted GM’s stake from about 9.9 percent to 8.5 percent, according to data from regulatory filings.
Ally, formerly known as GMAC, was once the in-house financing arm of GM. The pending sale was reported by The Wall Street Journal, which described the deal as a private placement valued at about $900 million.
GM's stake is held indirectly in an independent trust, according to the automaker's quarterly securities filing. The stake was required to be sold by Dec. 24 before the Federal Reserve granted a two-year extension in October.
Gina Proia, an Ally spokeswoman, and GM's Tom Henderson said their companies had no comment on the sale.
Ally has been rebuilding its finance operations since selling a controlling stake in GMAC to private equity firm Cerberus Capital Management in 2006.
In November 2012, GM agreed to pay $4.2 billion for Ally's European and Latin American auto lending operations as it moved to expand its in-house financing at its GM Financial unit as a way to boost sales. GM closed on those deals in April and October this year.
Last month, Ally bought back $5.9 billion worth of its shares from the U.S. Treasury and has repaid more than 70 percent of the total aid provided by the government.
Ally received a $17.2 billion bailout during the financial crisis. Last month, the Federal Reserve approved the company's 2013 capital plan, clearing the way for repayment to Treasury.
Ally has struggled to recover from the mortgage meltdown. Last year, it put its troubled home loan subsidiary Residential Capital LLC into bankruptcy to stanch the bleeding from bad mortgages.
Reuters contributed to this report.