Asia Bizz: In some relief for the India’s national carrier, Air India’s Financial Restructuring Plan (FRP) has been approved by the Consortium banks. This approval can help the Airlines to save several hundred crores in the first year itself.

On March 30, 2012, Air India as a part of the FRP, signed four agreements with the SBI-led consortium. The agreements that were signed last evening included Working Capital Facility Agreement, Master Restructuring Agreement, Appointment of Facility Agent Agreement and Appointment of Trustee Agreement.

The officials said that the Cabinet approval for infusion of funds is still awaited and is expected to be received some time next week. It was also said that the implementation of the FRP would begin after the Union Cabinet approves additional equity infusion in to the airline. At the signing ceremony, officials of at least 19 banks were present.

One of the major highlights of the agreement includes the conversion of Rs. 10,500 crore of the Air India’s working capital in to long-term loan, which comes at an annual interest of 11 percent. The officials added that first year interest would accumulate in a funded interest term plan and that this would lead to substantial savings of about Rs 1,000 crore in 2012-13.