DETROIT — General Motors says it has sold its 8.5 per cent stake in Ally Financial for about $900 million.

The Detroit automaker said Thursday it expects to record a gain of $500 million from the deal in its fourth-quarter earnings.

It wouldnt say who bought the stake, which was sold in a private placement.

Ally is GMs former auto loan and mortgage arm. It had to be rescued by the U.S. government at the height of the financial crisis.

The Treasury Department still holds a 64 per cent stake in Ally, with the rest held by a mix of institutional investors.

GM says the deal gives the company more financial flexibility. It says Ally will continue to make loans to GM dealers and customers.