General Motors Co. (NYSE: GM) may soon be much closer to Ally Financial again. An SEC Filing this morning shows that GM, via its wholly owned captive finance entity General Motors Financial Company Inc., disclosed Regulation FD requirements.
The filing states:
Ally Financial Inc. has announced plans to divest its international operations in Canada, Mexico, Europe and Latin America. GM Financial and a number of other third parties submitted indicative bids in July and are at the preliminary stages of the bid process investigation. There is no assurance that GM Financial will be successful in acquiring any of Ally Financial’s international operations. However, if GM Financial is successful in completing a transaction, it could expand its operations materially in international markets. Such expansion could have significant impacts on its business, results of operations, liquidity and financial condition. If GM Financial is the successful bidder, its consolidated assets could potentially more than double, and it could incur substantial amounts of indebtedness, including secured debt. Depending on the scale of the operations GM Financial may acquire and the amount of equity that it invests in such a transaction or transactions, its consolidated debt and other liabilities could potentially more than double and its ratio of adjusted assets (giving effect to the transaction or transactions) to adjusted equity (excluding goodwill) could potentially more than double as well.
How this all pans out for any future structure of Ally Financial and a public offering remains up in the air. Effectively, we have to know who wins the bid, and even if a bid turns into a sale or not.
GM shares are up 0.9% at $20.71 against a 52-week trading range of $18.72 to $27.68.
JON C. OGG
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