India’s TruJet seeks new investors as Interups drags feet

TruJet (2T, Hyderabad Int’l) is scouting the market for new investors to help it meet urgent financial obligations as US-based fund Interups, which pledged to inject INR15.157 billion rupees (USD203 million) into the carrier, will not make the payment before mid-August, The Hindu BusinessLine has reported.

Interups Chairman Laxmi Prasad said that while the fund remained committed to the acquisition of a 49% stake in TruJet, it would likely only transfer the money between August 15 and August 30. The initial investment agreement, signed in April 2021, foresaw the payment by June. While Prasad did not give a detailed explanation for the delay, he said that the fund was still awaiting approval from the Indian Directorate General of Civil Aviation (DGCA) to appoint new board members.

As the transaction was not closed according to the original schedule, TruJet defaulted on its payments due in June and is currently struggling to meet its current expenses. It has also deferred salary payments to its employees. Another investor could help it survive until Interups’ injection is transferred.

Following the initial agreement to acquire the stake, Interups outlined ambitious plans to add fifty-four A220s and fifty-four E190-E2s for the airline. However, as the actual financial injection has been delayed, the airline is struggling to keep even its current fleet of seven Avions de Transport Régional turboprops. After the airline defaulted on its payments, Elix Aviation Capital reportedly issued grounding notices for three of its ATR72-500s and DAE Capital for both of its ATR72-600s. This left TruJet with only two available aircraft, both ATR72-500s leased from Aergo Capital – one of which, however, has been under repair since November 2020. However, the airline has since reached an agreement with Elix and reactivated two of its -500s in mid-July 2021, Flightradar24 ADS-B data shows.