Chrysler loan payoff could save it $300 million a year: CEO

Features Reuters

MACOMB, Michigan (Reuters) - Chrysler Group LLC could save up to $300 million a year in interest payments if it pays off its loans to the U.S. government on Tuesday as expected, its CEO said on Monday.

Continue Reading Below

"Tomorrow's payoff day," Sergio Marchionne told reporters at the grand opening of the first Fiat dealership in Michigan.

Marchionne, the chief executive of both Chrysler and Italy's Fiat <FIA.MI>, said that Fiat's current 30 percent stake in Chrysler will rise to 46 percent when it pays off the loans.

"It goes up as soon as the money transfers," he said.

Marchionne reiterated that Fiat hopes to boost its Chrysler stake further by the end of the year.

He added that "over time" Fiat could increase its stake to as much as 76 percent in part by acquiring a portion of the stake held by the healthcare trust affiliated with the United Auto Workers union.

Continue Reading Below

(Reporting by Ben Klayman; editing by Carol Bishopric)