DETROIT (AP) — General Motors Co. is bidding for Ally Financial's international operations, a move that would substantially increase its lending overseas but add a lot of debt to its books.
In a regulatory filing Monday, GM said its financing arm, GM Financial, submitted a bid last month for Ally's operations in Canada, Mexico, Europe and Latin America. GM didn't say how much it offered.
Ally said in May that it was exploring a sale but has given no details about when or if that sale will take place. On Monday the company would only say it is "encouraged by the initial progress."
GM is one of 30 bidders for Ally's international operations, which hold $31 billion in assets and has a book value of $7.6 billion. Ally earned $72 million from its international operations in the second quarter, up 4 percent from a year ago.
Ally, which is 74 percent owned by the U.S. government, was GM's financial arm until the banking industry meltdown in 2008. It needed a $17.2 billion bailout to survive the downturn. It has paid back $5.5 billion so far.
The sale of its international operations is one option to help Ally pay back the government. Another is a public offering of stock.
If GM Financial is the successful bidder, the company said the addition of the overseas auto loan, banking and insurance operations could potentially more than double its assets. But GM said that depending on how much of the operations it's able to acquire, its debt and other liabilities could potentially more than double. GM had $5.1 billion in automotive debt at the end of the second quarter.
This isn't GM's first big move to increase its auto financing capability. In 2010, it bought AmeriCredit Corp., a Texas company that specializes in subprime loans, for $3.5 billion. At the time, AmeriCredit had a portfolio of 800,000 customers and $9 billion worth of auto loans.
GM shares fell 7 cents to close at $20.47.