LONDON (Reuters) -German airline group Lufthansa is in talks with Spanish carrier Air Europa about the possibility of acquiring a minority stake, according to two sources with knowledge of the talks.

The airline is 20% owned by BA-parent IAG, which backed out of taking full ownership last year due to regulatory concerns.

Air Europa is seeking funds to pay an outstanding package of loans worth a total of 475 million euros ($491.8 million) granted by the government during the pandemic.

According to Spanish newspaper el Economista, the discussion with Lufthansa is about the German flag carrier taking a 20% stake in Air Europa. One source told Reuters the talks were focused on a stake around 20%.

Air Europa and Lufthansa declined to comment.

Air Europa owner Globalia said in November that Air France-KLM was potentially interested in a 20% stake in the carrier.