GM Generali

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GMAC Inc., formerly GMAC LLC, said Wednesday that the lender changed its company structure from a limited liability company to a corporation.

The transformation, announced in a regulatory filing, would allow GMAC the option to become a publicly traded company through an initial public offering of its shares. Currently on federal support, a corporation status could provide GMAC with an exit strategy when and if it chose to wean itself off government help.

"The incorporation is another step in our transformation to an independent financial services company," said Gina Proia, a GMAC spokeswoman.

The giant lender now serving Chrysler LLC as well as General Motors Corp. (GMGMQ) is seen as crucial to the survival of the struggling auto makers while they restructure their operations in bankruptcy court. GMAC provides loans to auto dealers who use the funds to stockpile their inventory of new vehicles. GMAC also lends to consumers buying these vehicles.

GMAC, weighed down by piling losses on its auto and mortgage business, transformed itself into a bank-holding company in December in attempts to garner federal funding.

The U.S. Treasury Department said in May it would swap $884 million of its existing $5 billion preferred-stock investment for common stock, giving the U.S. government a 35.4% equity stake in the lender. This stake could increase to more than 50% if GMAC, amid potential mounting losses and meager capital levels, was to convert the government's investments into common equity.

As part of its efforts to be recognized as an independent lender, GMAC, the former financing arm of GM, has also rebranded its bank unit, which is now known as Ally Bank.

-By Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6729; aparajita.saha-bubna@dowjones.com

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