The life-saving multi-million-dollar cash infusion for India's struggling regional carrier TruJet could finally see the light of day in August, according to recent reports. The airline has had a rough few months lately, which involved grounding planes, deferring salaries, and lessors coming forward to repossess planes. The much-awaited stake purchase deal is necessary for TruJet to start operations again.
Funds to exchange hands soon
In May, Hyderabad-based TruJet got some hope of another chance at survival after WinAir (We Indian Nationals) Aviation Pvt Ltd announced acquiring a 79% equity stake in the airline in exchange for â¹2,00,00,00,000 (a little over $25 million).
The Time of India reports that WinAir's chairman and managing director, Samuel Timothy plans to conclude the deal in August and is sourcing a significant part of the amount from Aaryans Group.
WinAir is associated with the Aaryans Group of Companies, which are involved in multi-sector business, including green energy, infrastructure, steel, media and entertainment, hospitality and IT, real estate, and food & beverage, among others.
Timothy says that the management teams of TruJet, Winair, and Aaryans Group will meet for the first time on August 1st to discuss further course of action and that that money is likely to exchange hands soon after.
Winair could take more than 79% equity
Timothy told TOI that the Aaryans Group has issued a cheque (he didn't reveal the amount) and that the remainder of the amount to seal the deal is also expected soon.
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The deal between Winair and Aaryans Group is also likely to be concluded around the same time as the primary stake purchase deal of TruJet. Winair had initially announced that it would claim 79% shares of the airline after the transaction, but the latest report suggests that it could end up taking more than that.
How much more? We'll have to wait for the deal to finalize in the coming days to know the exact terms. The arrangement will make WinAir a parallel airline company, which essentially means that it will use the equipment and permits of an existing airline operator to conduct business.
Clearing dues a priority
TruJet hasn't operated a flight since February and has struggled to maintain operations following the pandemic. The airline recorded an operating loss of approx. $18.6 million in FY21, $1.3 million in FY20, and $2.2 million in FY19.
With dwindling finances came the struggle of maintaining timely salary handouts to employees, which is likely to be the owners' top priority after the deal is finalized. Winair's initial plan is to immediately clear the salaries for a couple of months and then devise a plan with the HR department to clear the remaining dues.
If all goes well, the Indian skies could see TruJet's ATRs back in action soon.
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Source: The Times of India