Banks approve Air India's FRP
As part of the FRP, Air India signed four agreements with the SBI-led consortium late last evening. 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 include 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.
"The first year interest would accumulate in a funded interest term plan," they said, adding these would lead to substantial savings of about Rs 1,000 crore in 2012-13 itself.
In addition, non-convertible debentures (NCDs), guaranteed by the government, worth Rs 7,400 crore would be issued and subscribed by the investors, the officials said, adding proceeds from the NCDs would be used to repay the lenders.
Apart from this, part of the working capital of about Rs 3,500 crore would be restructured as cash credit arrangement.
Under the FRP, Air India has proposed that the
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