Braithwaite: Treasury majority stake in GMAC

GMAC is to receive $3.8bn in new government investment via the troubled asset relief programme, the Treasury said , in the final stage of filling a capital hole identified in the "stress tests" on banks earlier this year. The deal brings to a close a busy end to the year for the Treasury's $700bn Tarp scheme, with most elements of the bail-out programme winding down and companies such as Bank of America and Citigroup racing to repay the government and escape restrictions on pay and hiring.

Fannie Mae and Freddie Mac, the rescued mortgage guarantors, are - like GMAC - going the way of deeper state involvement: the Treasury removed a $400bn cap on state aid on Christmas eve.

The Treasury said yesterday that it would convert some of its existing preferred stock in GMAC into common equity, a move that will see the government's ownership increase from 35 per cent to 56.3 per cent. Cerberus, the private equity firm, will be the next biggest shareholder with 14.9 per cent. GMAC has been in talks with regulators and the Treasury for much of the year after abandoning hopes of filling the capital shortfall by raising equity privately...