GM sells $1 bln preferred shares of Ally Financial

General Motors Company (GM) Wednesday announced the sale of its preferred stocks holding of auto lender Ally Financial Inc. in a public offering for a total of $1 billion.

Chris Liddell, GM's vice chairman and chief financial officer, said the sale is a step "to strengthen and simplify the company' s balance sheet."

The transaction will result in a book gain of 300 million in GM' s income statement for the first quarter of 2011.

The shares represent 100 percent of the Ally Financial's outstanding Series-A preferred stock and following the sale, GM's investment in Ally Financial will only 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.