Fast forward to 2011, and GM has announced the sale of its $1 billion worth of Class A shares of Ally. The sale of the company's outstanding shares will allow the automaker to claim an additional $300 million profit for the first quarter of 2011. Chief financial officer Chris Liddell says that the automaker is "taking another step forward in our strategy to strengthen and simplify the company's balance sheet."
Even with GM's announced preferred stock sale, the automaker will still own 9.9 percent of Ally's common shares. Hit the jump to read over GM's announcement.
The shares, which represent 100 percent of the Ally Series A preferred stock outstanding, have an aggregate liquidation preference of $1 billion.
"Today, we are taking another step forward in our strategy to strengthen and simplify the company's balance sheet," said Chris Liddell, vice chairman and chief financial officer.
The transaction will result in a book gain of $0.3 billion to be recorded in the first quarter of 2011. Following the sale, GM's investment in Ally Financial will consist of a 9.9 percent interest in Ally common stock.
The offering was underwritten by Credit Suisse, BofA Merrill Lynch, Deutsche Bank Securities and Barclays Capital. This news release shall not constitute an offer to sell or the solicitation of an offer to buy any security.