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Lufthansa aims to finalise a state aid rescue package worth up to $10.8 billion next week after the coronavirus crisis forced it to ground almost all of its planes, people close to the matter said.

The package will consist of equity from Germany’s new economic stabilisation fund (ESF), state-guaranteed loans from Germany and debt supplied by Austria, Switzerland and Belgium, where Lufthansa subsidiaries are based, they added.

Lufthansa is in intensive negotiations with the governments regarding various financing instruments to secure the group’s solvency in the near future, Lufthansa said as it reported a first-quarter loss of $1.3 billion euros late on Thursday.

The company declined to comment further and the German government declined to comment.

CEO Carsten Spohr this month said that Lufthansa would seek state aid in Germany, Austria, Switzerland and Belgium, citing cash burn at a rate of $1 million per hour, meaning its $4 billion cash reserves will be inadequate.

The equity injection from the ESF possibly up to $4 billion could initially come as a non-voting form of capital dubbed “silent participation”, two of the sources said, adding that some or all could be converted into shares at a later stage.

Roughly $5 billion in loans, 80 percent guaranteed by German state bank KfW, could be part of the package, they said, adding that Austria, Switzerland and Belgium could contribute a combined $1 billion to $1.5 billion.

The three countries are pushing for their individual hubs to be strengthened if they participate in the rescue.

In Flux

“The exact portions of the different pots of money are still in flux,” another source close to the matter said.

The German government is expected to present its proposal to Lufthansa this week, with talks to be finalised next week, the sources said, adding that it is sure to include fresh equity.

Lufthansa currently has a market capitalisation of $4 billion and its shareholders would need to approve any large capital increase.

A potential relaxation of refund rules for airlines is not taken into account in the package, the sources said, because an EU decision on any changes to the existing regulations is not expected in the short term.

The German group’s rivals, including Air France-KLM , IAG and easyJet, have also ground to a halt in the face of the pandemic and are expected to receive state support.

Lufthansa, which owns Swiss International, Austrian Airlines and Brussels Airlines, is working with Goldman Sachs as its lead adviser, while Deutsche Bank is its main financing partner, the sources said.

The banks declined to comment.

Austria, which has said Lufthansa can apply for state aid, declined to comment. The Swiss government said that no decision has been taken and communication on the matter would take place at the end of the month. The Belgian finance ministry declined to comment on Belgium’s plans.

(Additional reporting by Christian Krämer, Francois Murphy, Paul Arnold, Philip Blenkinsop, Editing by Ludwig Burger and David Goodman)

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Photo Credit: A Lufthansa aircraft approaches Hamburg Airport. Kevin Hackert / Unsplash