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Hit by the Covid-19 pandemic, TruJet may raise up to ₹250 crore in a bid to keep its operations ongoing.
According to two people in the know, TruJet promoter Megha Engineering and Infrastructure Ltd (MEIL) has been scouting for a potential investor.
“MEIL is scouting for either an investor to take a stake in the company or buy the company out entirely,” said a source. Per MEIL’s proposal, it will require at least ₹80-100 crore in equity along with the takeover of liability of ₹150-200 crore, the source added.
However, when contacted, K Pradeep, Group Director of MEIL, denied that the company is seeking any investment. But according to top sources, a deal is likely to be struck before the end of February.
The low-cost carrier started operations in July 2015. For FY19, its revenues stood at ₹368.3 crore; however, its expenses were ₹378.5 crore, leading to a net loss of ₹10.1 crore.
TruJet is based out of Hyderabad’s Rajiv Gandhi International Airport. The carrier operates a route network primarily focussing on the Andhra and Telangana regions, with destinations including Tirupati, Hyderabad, Aurangabad, Vijayawada and Rajahmundry.
Its fleet contains aircraft of the ATR family . In September 2020, the airline had dues to the tune of over ₹270 crore to its lessors. The lessors grounded five out of seven aircraft over unpaid dues. Later, with negotiations and payment of dues, the aircraft were released.
Pandemic impact
TruJet, like every other airline, was significantly hit by the pandemic. On the one hand it had reduced operations and, on the other, low passenger load factor (PLF). It has now resumed operations with four aircraft, on at least 50 per cent of its routes. However, according to LSN Murthy, CEO of TruJet, the PLF is not looking good so far for the airline.