Companies

Ex-promoter Vankayalapati Umesh regains control of TruJet from MEIL

Forum Gandhi Mumbai | Updated on October 12, 2021

MEIL promoters have sold the airline back to Umesh   -  The Hindu

In talks with Irish aircraft lessor Elix Aviation for equity stake

Megha Engineering & Infrastructures Ltd (MEIL) has transferred cash-strapped TruJet’s ownership to its former owner Vankayalapati Umesh for an undisclosed amount. Umesh has taken over as the Managing Director on October 9 even as most of the board of TruJet resigned.

In an e-mail sent to the airline’s employees, Umesh said that Ireland-based turboprop aircraft lessor Elix Aviation Capital is keen to come on board the regional carrier as an equity partner besides leasing 10 aircraft, two of them immediately.

“I am at advanced stages of discussion with entities for institutional funding and to raise funds for the airline and I believe to be able to conclude the same in the next three months,” Umesh said in the e-mail, seen by BusinessLine.

Turbo Megha Airways Private Limited was incorporated on March 14, 2013 with Vankayalapati Umesh as the promoter. In 2014, he sold a majority stake in the airline to Hyderabad-based Megha Engineering and Infrastructures Limited in order to fund their operations.

Restructuring the airline

When contacted by this newsapaper, Umesh confirmed the development. “I am restructuring TruJet,” he said.

A MEIL spokesperson refused to comment. However, a source close to the promoters of MEIL confirmed that the airline has been sold to Umesh.

For six months, Turbo , has been scouting for an investor, with no success. Laxmi Prasad of Interups had said that he would infuse funds in the company. However, the company is yet to receive any money from him. In April, TruJet and US-based fund Interups Inc had signed an agreement under which Interups agreed to pick up 49 per cent stake for an undisclosed amount. The deal was seen as a huge relief to the cash-strapped airline, but Interups is yet to infuse the funds as agreed.

When BusinessLine contacted Prasad to ask if he was asked to leave, he maintained that he was still a part of the company. However, when asked if he had infused the agreed funds, he did not comment.

Leasing of aircraft

In his e-mail to the employees, Umesh further added, “Our existing lessor, Elix Capital, is also keen on leasing 10 aircraft to us with two aircraft immediately. They also want to be equity partners in the airline and will bring in value by way of aircraft induction and their global relationship in the aviation industry.”

Elix Aviation Capital is backed by California-based asset management firm Oaktree Capital Group, and currently owns and manages a portfolio of 65 turboprop aircraft.

Trujet, according to the MD, has been operating for 4.5 years, expanding gradually until the pandemic hit and like all businesses globally and locally, the carrier was affected by the lockdown and the severity of Covid-19.

“While it impacted in a huge cash outflow for the parent company, MEIL realised that this was not part of its core business functions and wanted to handover the airline business to someone capable and keen on its safekeeping and continuous expansion,” Umesh said.

A source told this newspaper that it will need ₹300 crore immediately to stay afloat.

“MEIL has put its faith and trust in me to run this airline and has transferred the company to me,” he added.

Published on October 12, 2021

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