Ally, formerly Bankrupt GMAC, Files With SEC for IPO

Ally Financial Inc. today announced that it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission (SEC) for a proposed initial public offering of stock (IPO) in the reorganized company. U.S. taxpayers via the Treasury Department hold 74% of Ally at a cost of more than $17 billion,the result of a controversial bailout during the financial crisis that began in 2008.

Ally’s is one of the leading suppliers in the U.S. of wholesale dealer loans, called floorplans, and is the leading retail provider of vehicle finance. Ally’s taxpayer-financed bailout remains a vital aspect to the thus far successful reorganizations of General Motors and Chrysler. U.S. (and Canadian taxpayers) have large interests in those recovering automakers, as well.

The offering from Ally will consist of common stock to be sold by the U.S. Treasury. The number of shares to be offered, the price range, and timing for the proposed offering have not yet been determined, but in the SEC filling a $100 million was used. Such large amounts in an SEC filing often are drastically reduced by the time the stock finally goes on sale to the public after three months or more of review by the SEC.

On 30 December 2010, Ally Financial and the U.S. Treasury agreed to convert $5.5 billion of the $11.4 billion of mandatory convertible preferred (MCP) securities issued by Ally and owned by the U.S. Treasury into common equity. Some, maybe all of these shares will be used in the IPO.

For the full-year of 2010, Ally – formerly GMAC – reported net income of $1.1 billion, compared to a net loss of $10.3 billion in 2009. Core pre-tax income in 2010 totaled $2.5 billion, compared to a pre-tax loss of $5.8 billion in the prior year.

Citigroup Global Markets Inc., Goldman, Sachs & Co., J.P. Morgan Securities LLC, and Morgan Stanley & Co. Incorporated are acting as the joint global coordinators and joint book-running managers of the offering.

Copies of the preliminary prospectus of the Ally offering may be obtained at the SEC website at http://sec.gov.

About Ken Zino

Ken Zino is an auto industry veteran with global experience in print, broadcast and electronic media. He has auto testing, marketing, public relations and communications expertise garnered while working in Asia, Europe and the U.S.
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