The Danish government said Friday it is prepared to increase its stake in troubled Scandinavian airline SAS and write off part of its debt.

"SAS is in a very serious situation. With today's agreement, there is a consensus for the state to continue to take responsibility and... contribute to a solution," finance minister Nicolai Wammen told a news conference.

Both Sweden and Denmark each hold stakes of 21.8% in SAS and Copenhagen is willing to raise its shareholding to up to 30%, Wammen said. 

In addition, the Danish state was also prepared to "accept writedowns and the conversion of debt" in line with market conditions, the finance ministry said. 

Copenhagen is willing to write off 3.5 billion (Danish) kroner (€4.7 million) that it is owed by SAS, the ministry said. 

SAS shares, which had fallen to a new low on Thursday after its pilots threatened to go on strike at the end of June, staged a rebound on Friday, surging by more than 33%.

The Swedish government had said on Tuesday that it would not inject more capital into SAS, a week after the airline announced plans to raise 9.5 billion Swedish kronor (€900 million) in new capital.

But Stockholm said it would propose to the parliament that SAS be authorised to convert the debt it owes to the state into equity capital, a move welcomed by the airline.

The airline, which cut thousands of jobs due to the pandemic, posted a net loss of 1.5 billion Swedish kronor in the second quarter, compared to a net loss of 2.4 billion kronor a year earlier.