The Treasury Department is preparing to reduce its stake in Ally Financial by more than half, through an initial public offering of stock.
Ally, the former financing arm of General Motors that the government rescued in the financial crisis, said in a regulatory filing on Thursday that the Treasury planned to sell 95 million shares in an I.P.O. Currently, the Treasury owns 177.3 million shares in Ally, or about 37 percent.
The shares are expected to be priced at $25 to $28 in the offering, Ally said. At the high end of that range, the deal would raise $2.7 billion.
The underwriters of the I.P.O. will have the option to buy an additional 14.3 million shares, the filing said. Including those shares, the deal could raise up to $3.1 billion.
A successful offering would provide a pathway for the Treasury to eventually sell its entire stake in Ally, a goal it has been working toward for some time. The company received a $17.2 billion rescue in the crisis.
To date, the Treasury has recovered about $15.3 billion, or roughly 89 percent of the initial bailout.
Ally has applied to list on the New York Stock Exchange with the ticker symbol ALLY. The company itself does not plan to sell shares in the I.P.O.
Citigroup, Goldman Sachs, Morgan Stanley and Barclays are the lead book-runners of the offering. Lazard is providing the Treasury with advice.
