The Air France-KLM board of directors was meeting on Monday to approve new refinancing measures backed by the French government to help the airline group through the COVID-19 crisis, sources familiar with the situation said. Air France-KLM is expected to convert some of its 4 billion euros ($4.7 billion) in direct government loans into hybrid instruments and raise new equity under plans to be announced on Tuesday morning, officials said. sources at Reuters.

Both the company and the French finance ministry declined to comment on Monday. Air France-KLM, which last year received a total of 10.4 billion euros in loans guaranteed by France and the Netherlands, has been discussing for months a multi-stage recapitalization plan to alleviate the resulting indebtedness.

After lengthy discussions with Brussels over the number of take-off and landing slots at Paris-Orly airport to be ceded by Air France in exchange for renewed aid, the French finance minister said on Sunday that an agreement compromise had been found. France and the Netherlands each own nearly 14% of Air France-KLM, and the Dutch state has held separate discussions with the EU about converting its €1 billion loan to KLM into hybrid debt, in exchange for slot concessions at Amsterdam-Schiphol airport.

($1 = 0.8467 euros)

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