(Updates with comment on new business plan, shares)
By Sabina Suzzi
SIENA, Italy, June 30 (Reuters) - Fiat should complete the sale of aviation unit Fiat Avio "in hours", Chairman Umberto Agnelli said on Monday, while praising a new business plan that will use the proceeds to help revive Fiat's car business.
Fiat agreed to sell Fiat Avio to private equity fund Carlyle and Italian defence group Finmeccanica in April, but a deal has been long in coming, with reported quibbles over the price, now likely to be slightly less than 1.6 billion euros ($1.8 billion).
Agnelli had originally expected to seal the sale of Fiat's most profitable unit by the end of May.
"First I told you all it was a matter of weeks, then that it would be last weekend, but now it is a matter of hours," Agnelli told reporters.
Fiat sold a spate of assets last year, including shares in partner General Motors Corp , to help cut debt.
But seven billion euros raised from this year's sales of client financing unit Fidis, insurer Toro and Avio will feed into a 19.5 billion euro restructuring aimed to return Fiat to net profit by 2006 from 2002's record 4.3 billion euro loss.
Analysts had said the revival plan, unveiled last week by new Chief Executive Giuseppe Morchio, did not do enough to chop costs at cash-bleeding Fiat Auto and failed to increase its production levels at 70 percent of capacity in Italy.
Under the plan, Fiat will raise another 1.8 billion euros in a capital increase due to run in July, shut 12 factories and chop 6,900 jobs net. Its main shareholders Ifil and Ifi will also carry out capital increases.
"It is not a revolutionary plan but it's what Fiat needs -- like a good father giving good advice to his family," said Agnelli, who is now head of the family that founded Fiat 104 years ago and still owns about a third of the company via Ifil.
"We have made some drastic decisions in the last four months to focus on the most important sector -- cars," Agnelli added, referring to the Fiat Avio and Toro sales.
Fiat shares have fallen every day since the plan was announced. On Monday, the stock dropped another 2.8 percent to 6.33 euros, still well above the capital increase issue price of five euros, against a rise in other European auto stocks .
Ifil dropped 3.27 percent to 2.04 euros after tumbling as much as 15 percent on Friday. Traders said the Ifil capital increase price of 1.30 euros per share was too high and there was little appetite for the stock.