Fiat: to raise Chrysler stake in days

AP News
Posted: Apr 11, 2011 12:04 PM
Fiat: to raise Chrysler stake in days

Fiat and Chrysler CEO Sergio Marchionne said Monday that the Italian automaker will increase its stake in Chrysler by 5 percent within days.

Fiat SpA already controls 25 percent of Chrysler LCC, Detroit's third largest automaker.

Marchionne said only a few details need to be worked out and that "it's a matter of days" before they're sorted, according to the ANSA and LaPresse news agencies. The 5-percent increase will be for boosting Chrysler sales abroad, a government-set milestone.

Marchionne said the increase might be finalized as early as Tuesday, according to ANSA. He was speaking during the presentation of Jeep vehicles near Turin.

Fiat took a 20 percent share in Chrysler in 2009, gaining effective control after Chrysler emerged from bankruptcy. In exchange, Chrysler got small-car and clean-engine technology and Fiat's management know-how.

The Italian company increased its stake to 25 percent this year, and Marchionne has said he expects to raise it to 35 percent by the end of 2011 with the introduction of a 40 mpg car.

It then can purchase another 16 percent once it has cleared loans from the U.S. and Canadian governments. Marchionne has in the past said he expected that to happen in 2011, but on Monday said that could slip into next year depending on when Chrysler is able to repay government loans.

"I don't know if I'll do it this year, the intention is there. It depends on if we are able to refinance the debt with the government," Marchionne said.