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The U.S. Department of the Treasury today announced that it expects to recover an additional $181 million from the Ally Financial Inc. initial public offering (IPO) after the underwriters exercised their option to purchase 7,245,670 additional shares at the IPO price. Settlement is expected to occur on May 14, 2014.
This sale brings the total recovery on the Ally investment to $17.8 billion.
On April 9, Treasury announced that it agreed to sell 95,000,000 shares of Ally common stock at a price to the public of $25.00 per share, for $2.375 billion in proceeds to taxpayers.
After the IPO closed, taxpayers held approximately 17 percent of common stock in the company. After giving effect to this sale, taxpayers will hold approximately 16 percent of Ally common stock.
“Ally’s IPO marked another significant milestone in Treasury’s effort to wind down the Troubled Asset Relief Program (TARP),” said Acting Assistant Secretary for Financial Stability Tim Bowler. “Taxpayers have recovered more than was disbursed to Ally, and we will continue to evaluate exit strategies for the remaining Ally investment and wind down TARP as soon as practicable, and in a way that maximizes taxpayer value.”
TARP’s goal was to stabilize the financial system and prevent a second great depression, not to make a profit.
Still, after accounting for the proceeds from Ally’s IPO, taxpayers have recovered $438.6 billion, including the sale of Treasury’s AIG shares, compared to total TARP investments of $423.7 billion.
