NEW YORK (Fortune) -- GMAC, the troubled finance company that last week scored a third government bailout, said Tuesday it expects to post a record fourth-quarter loss of $5 billion.
The company also said it has decided to try to sell its ResCap mortgage unit, which has lost billions of dollars since the U.S. housing market crashed. Those losses have strained the already stretched finances at GMAC, which is best known as a lender to the troubled U.S. auto industry.
ResCap has been "very much a millstone around the company's neck," GMAC chief Michael Carpenter told investors on a conference call Tuesday afternoon. He said GMAC's board entertained all alternatives for ResCap, including possible bankruptcy filings, before deciding to consider its so-called strategic alternatives.
Asked if he could describe what the alternatives might be, Carpenter replied, "Not really." He then said GMAC might sell some mortgage assets but added that the GMAC's plan is essentially "a blank sheet of paper."
GMAC last week raised $3.8 billion by selling preferred securities to the government, satisfying the capital deficit identified during stress tests last spring. The sale gave the U.S. a 56% stake in GMAC while cutting the stake of other shareholders, including private equity firm Cerberus and car maker GM, by a third.
GMAC got $7.5 billion from the government at the end of 2008 and $6 billion in the middle of last year, as regulators sought to shore up the sagging auto financing market.
GMAC lost more than $5 billion in the first nine months of 2009 and has lost money in six of the past seven quarters, including two quarters in 2008 in which it lost at least $2.5 billion.
|Anadarko Petroleum C...||77.03||-6.64||-7.94%|
|Bank of America Corp...||15.24||-0.01||-0.07%|
|Ford Motor Co||16.71||0.32||1.95%|
|Cisco Systems Inc||20.46||-0.05||-0.22%|
Netflix is embracing the art of the "binge" as it seeks to sell more subscriptions during the holidays. More
A labor watchdog group says conditions at facilities of Apple supplier Foxconn have improved in recent months, though the factories are still in violation of Chinese laws on work hours. More
Small businesses often don't last longer than five years, but these companies have been around -- and thrived -- for centuries. Here are their secrets for long-term success. More