General Motors Company said it is selling all of its shares of Series A fixed rate perpetual preferred stock in Ally Financial [nee GMAC] in a registered public offering for US$1bin.
The shares, 100% of the Ally Series A preferred stock outstanding, have an aggregate liquidation preference of $1bn.
“Today, we are taking another step forward in our strategy to strengthen and simplify the company’s balance sheet,” said Chris Liddell, GM’s soon-to-depart chief financial officer in a statement.
GM said the deal will result in a book gain of $0.3bn it will record in this first quarter of 2011. Following the sale, GM’s investment in Ally Financial will consist of a 9.9% interest in Ally common stock.
The offering was underwritten by Credit Suisse, BofA Merrill Lynch, Deutsche Bank Securities and Barclays Capital.