People familiar with the matter said that Perella’s appointment would be announced by the Treasury as soon as Thursday and comes as Ally executives begin to meet with banks to discuss its stock offering, expected to happen sometime this year.
Ally is interviewing about 10 banks as possible underwriters for the IPO – expected to include all the largest Wall Street institutions – in a series of meetings in New York this week. The offering could value Ally at between $8bn and $15bn, those people added.
Perella Weinberg, in contrast, will be tasked with representing the interests of the US government in the offering.
The Treasury owns about 74 percent of Ally – the new name for GMAC – after investing a total of $17.2bn into business during 2008 and 2009 as part of the bailout of the US car industry.
The government has taken to appointing an independent investment bank, sometimes called a boutique adviser, to advise it on the process of unwinding some of its crisis-time investments.
A spokesman for Perella referred inquiries to the Treasury, who did not respond to a request for comment. Ally declined to comment.
Perella lost out to Lazard in the battle to advise the Treasury in last year’s IPO of General Motors. GM in November raised $20.1bn in one of the world’s largest public offerings, allowing the US government to cut its stake in the carmaker.
In December, Ally took the first step towards an IPO when the Treasury said it would convert $5.5bn of preferred stock in the financing company into common equity.
The conversion bolstered Ally’s common equity, bringing its capital ratios into line with other lenders in the sector and was designed to help the company raise funds on more favourable terms.
However, the US government still owns a further $5.9bn of convertible preferred stock, which could hamper the IPO process unless proceeds were used to redeem the remaining government ownership in the company.
Auto financing companies are once again back in vogue following the financial crisis. GM itself last year bought AmeriCredit, an independent auto finance business, for $3.5bn.
In December, Toronto-Dominion Bank snapped up Chrysler Financial, which was separated from its parent when Chrysler filed for bankruptcy, for $6.3bn as part of a push by the Canadian bank into the US consumer finance market.
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