Finnair Oyj plans to raise as much as €600 million ($632 million) by issuing new shares as the Finnish flag carrier seeks to prop up its balance sheet after its strategy was upended by the closing of Russia’s airspace in the wake of the war in Ukraine.

The Finnish state, the carrier’s controlling shareholder, backs the offering and plans to subscribe to its pro rata share of the new stock, the company said in a statement on Friday.

“Building a sustainable balance sheet is a core part of our strategy to drive sustainable growth by connecting Europe, North America and Asia via our Helsinki hub,” Chairwoman Sanna Suvanto-Harsaae said.

The rights issue is “the logical next step,” she said, after the airline racked up losses during the Covid-19 pandemic and then had to shift its strategy in response to being banned from flying across Siberia, the shortest route between Europe and Asia. The Finnish carrier has instead opted to switch to a more diversified long-haul network linking Europe to Asia, India, the Middle East and North America.

Read More: Finnair Ends Asia Focus, Downsizes With Russia Skies Shut

Finnair will use the net proceeds to pay the portion of the €400 million capital loan that remains outstanding after the offering and accrued interest, it said.

The offering will be conditional on the shareholder approval, with an extraordinary general meeting to be held Oct. 27, and is expected to be completed by the end of the year. The Finnish state owns 55.8% of the shares in Finnair.

Deutsche Bank AG and Nordea Bank Abp are the joint global coordinators, lead managers and underwriters of the offering.

--With assistance from Charles Daly.