U.S. to sell final $1.25 billion shares of Ally Financial from bailout
(Reuters) - The U.S. Treasury Department will sell its remaining 54.9 million shares of Ally Financial Inc ALLY.N acquired under the government's bailout of the auto lender, Ally said on Thursday.
The stake is worth about $1.25 billion, based on Ally's Thursday closing price of $22.75 on the New York Stock Exchange.
Separately, Ally said in a regulatory filing that it had received a subpoena from the Department of Justice for information related to its subprime automotive finance lending practices.
Ally also said in the regulatory filing it had agreed to voluntarily extend the statutes of limitation to allow the DOJ to continue its investigation related to representations made by Ally regarding Residential Capital, LLC, the company's former mortgage subsidiary, in connection with investments in Ally made by the Treasury Department under the Troubled Asset Relief Program.
Ally, the former financing arm of General Motors which was among the auto, housing and finance companies bailed out in 2009, said that with the sale of the government's remaining stake in the company it will exit TARP.
Taxpayers injected $17.2 billion into the lender during the financial crisis because of its mounting losses from subprime mortgages.
U.S. Treasury has already received $18.3 billion from its investment of $17.2 billion in Ally, the company said. The government sold the bulk of its stake when Ally went public last April.
In noting the subpoena received from the Justice Department, Ally said in its regulatory filing that other financial institutions had disclosed receiving similar requests earlier this year.
GM Financial, the in-house financing arm of General Motors Co (GM.N: Quote), said in October it had received subpoenas from state attorneys general and other authorities over similar issues.
(Reporting by Kanika Sikka in Bengaluru; Editing by Leslie Adler)
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