PARIS - The board of Air France-KLM is expected to meet on Monday to discuss a state-backed refinancing plan designed to strengthen its balance sheet after a year of coronavirus shutdowns, two sources familiar with the matter said on Friday.

The airline group, which last year received 10.4 billion euros ($12.2 billion) in government-backed loans, has been discussing a multi-stage recapitalization plan to lighten the resulting debt load, sources have said.

But the plan, likely to include conversion of a 3 billion-euro French government loan into hybrid instruments, has been held up by wrangling over European Union demands that Air France give up Paris-Orly take-off and landing slots as a condition.

French Finance Minister Bruno Le Maire signaled a breakthrough in those talks earlier this week, predicting an agreement within “a matter of days”.

Air France-KLM declined to comment on the airline group’s planned board meeting, first reported by Bloomberg.

EU officials had initially demanded a similar number of slots to the 24 ceded by Germany’s Lufthansa in Frankfurt and Munich in return for its government-backed capital hike, sources close to the talks have said.

That position drew protests from Air France, its unions and the government.

France and the Netherlands each own close to 14% of Air France-KLM, and the Dutch state has held separate EU talks over converting its 1 billion euro loan to KLM into hybrid debt in return for slot concessions at Amsterdam-Schiphol.

Converting the government debt will not be enough to right Air France-KLM’s balance sheet, say analysts, who predict a further dilutive capital increase will follow.

The group told investors it planned to raise “quasi-equity and equity”, after its balance sheet recorded 5.42 billion euros in negative shareholder equity as of Dec. 31.