Grappling with a fragile financial position, Air India's financial restructuring plan (FRP) has been approved by a consortium of banks, which may enable the ailing carrier save several hundred crore in the first year itself.
As part of the FRP, Air India signed four agreements with the SBI-led consortium late Friday. These were Master Restructuring Agreement, Working Capital Facility Agreement, Appointment of Facility Agent Agreement and Appointment of Trustee Agreement, airline officials said.
“The Cabinet approval for infusion of funds is still awaited and is expected to be received some time next week,” the officials said.
Implementation of the FRP would begin after the Union Cabinet approves additional equity infusion into the airline, they said. Officials of at least 19 banks were present at the signing ceremony here.
One of the major highlights of the agreements is conversion of about Rs.10,500 crore of the airline's working capital in to long-term loan, carrying an annual interest of 11 per cent.
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