By Clare Baldwin and Paritosh Bansal
NEW YORK (Reuters) - Ally Financial, an auto and mortgage lender majority owned by the U.S. government, is delaying a $6 billion IPO due to bad market conditions, two sources familiar with the situation told Reuters.
Continue Reading Below
The roadshow for the initial public offering was expected to launch late this week or early next week, which would have brought the company public before the U.S. July 4 holiday.
The other source said that the IPO could now come in late July or early August, or after the September U.S. Labor Day holiday.
The sources declined to be named as the information is not public. Ally and the U.S. Treasury declined comment.
Bad mortgage loans forced the U.S. Treasury to pour $17.2 billion into Ally during the financial crisis. It has recovered some of that money through repayments and dividends and continues to hold a 73.8 percent stake in Ally, formerly known as GMAC.
The U.S. government is currently in the process of exiting other remaining financial crisis-era investments including GM and AIG.
GM shares closed on Thursday at $29.45, or 10.8 percent below their $33 IPO price.
AIG's shares have also retreated since its $8.7 billion share sale. That sale raised less than the $10 billion to $20 billion some banking sources had suggested earlier in the year.
Apart from the Treasury, Ally's stockholders include private equity firm Cerberus Capital Management, with a 9 percent stake, and GM, which owns 4 percent directly and 6 percent through a trust.
(Reporting by Clare Baldwin and Paritosh Bansal; editing by Carol Bishopric, Bernard Orr)