Fiat SpA is close to raising its stake in US affiliate Chrysler to 30%, Chief Executive Sergio Marchionne said on Monday, bringing the Italian carmaker closer to a majority holding.
Fiat, which holds 25% of Chrysler, has reached a milestone to increase its holding and will announce the stake hike on Tuesday or in coming days, he told reporters on the sidelines of a vehicle presentation.
"We are pretty well done" in raising the Chrysler stake, Marchionne said.
Marchionne had said on Thursday that Fiat was close to 30% in Chrysler, the Detroit automaker. Raising its stake should be resolved within 30 to 60 days, he said.
Marchionne said last month he wanted to raise the stake in Chrysler to 51% this year but hinted taking the company public could be pushed into 2012.
Asked about Chrysler's performance, Marchionne, who is also CEO of Chrysler, said: "I'm satisfied with what we have done in the first quarter. It's totally in line with what we have told the market. Our cash position is strong."
Marchionne said he was still confident Chrysler would confirm its $2 billion target for operating profit this year.
He added: "We are watching the Japanese supply situation very, very carefully. It is going to have an impact on production."
Chrysler said on Wednesday that it was cutting some overtime work at some North American assembly plants due to parts shortages stemming from the March 11 earthquake and tsunami.
Shares in Fiat were down 1.14% at 6.525 euros at 0856 GMT. The STOXX Europe 600 autos index was down 2.28%.
Fiat was given management control and a 20% stake in Chrysler's 2009 bailout deal. Under that arrangement, Fiat can raise its stake in Chrysler to 35% if it meets three tests designed to put the US automaker on firmer financial footing. Fiat then has an option to buy an additional 16%.
Chrysler met the first test to develop a more fuel-efficient engine in January, giving Fiat a 25% stake. The US automaker must also reach international sales and distribution targets. To cross that hurdle, Fiat must sell Chrysler cars and trucks through 90% of its dealers in Latin America.