Ratings has withdrawn its 'CRISIL D' credit ratings the low-cost carrier after the company did not provide information essential to take a forward-looking view on the credit quality of the company, the rating agency said in a press release.
Crisil withdrew its rating on SpiceJet's bank facilities aggregating Rs 1,225 crore after the company's management failed to provide the requisite information. Crisil has now migrated the ratings on the cash-strapped company's bank facilities to ‘CRISIL C/CRISIL A4/CRISIL D Issuer N ot C ooperating'.
Do note, the rating agency adds the suffix 'issuer not cooperating' as the rating was arrived at devoid of management interaction and was derived based on the best available, limited or dated information and thus lacks a 'forward-looking component'.
“Crisil Ratings has been consistently following up with SpiceJet Limited (SpiceJet) for obtaining information through letters and e-mails apart from telephonic communication. However, the issuer has remained non-cooperative,” Crisil said.
Back in October, Crisil had downgraded its rating on SpiceJet's Rs 550 cr credit facility to 'CRISIL D' from 'CRISIL A4' along with a downgrade on its long-term facility to 'CRISIL C' from 'CRISIL B/Negative'. Crisil had mentioned the fact that SpiceJet hadn't provided it with adequate information to undertake a rating review. The rating agency had then noted that as aviation was one of the sectors that were affected the most due to the outbreak of the COVID-19 pandemic, the company's liquidity suffered due to the subsequent disruption in operations.
The SpiceJet engineering staff have been protesting across the country, demanding the reinstatement of their salaries and other benefits. However, the protests have now ended after the management assured them that their issues will be looked into by next week, sources tell ET. “We were assured that our demands will be addressed by November 8, 2021, and all of us have returned back to work,” an employee said.
Analysts have also highlighted the company's stretched liquidity amid volatile aviation turbine fuel (ATF) prices & forex rates. While the company is yet to release its Q2FY22 numbers, it reported a net loss of Rs 729 crore in Q1FY22 (Vs Rs 593 crore in Q1FY21) and net operating revenue of Rs 1,090 crore (Vs Rs 515 crore in Q1FY21).
Crisil withdrew its rating on SpiceJet's bank facilities aggregating Rs 1,225 crore after the company's management failed to provide the requisite information. Crisil has now migrated the ratings on the cash-strapped company's bank facilities to ‘CRISIL C/CRISIL A4/CRISIL D Issuer N ot C ooperating'.
Do note, the rating agency adds the suffix 'issuer not cooperating' as the rating was arrived at devoid of management interaction and was derived based on the best available, limited or dated information and thus lacks a 'forward-looking component'.
“Crisil Ratings has been consistently following up with SpiceJet Limited (SpiceJet) for obtaining information through letters and e-mails apart from telephonic communication. However, the issuer has remained non-cooperative,” Crisil said.
Back in October, Crisil had downgraded its rating on SpiceJet's Rs 550 cr credit facility to 'CRISIL D' from 'CRISIL A4' along with a downgrade on its long-term facility to 'CRISIL C' from 'CRISIL B/Negative'. Crisil had mentioned the fact that SpiceJet hadn't provided it with adequate information to undertake a rating review. The rating agency had then noted that as aviation was one of the sectors that were affected the most due to the outbreak of the COVID-19 pandemic, the company's liquidity suffered due to the subsequent disruption in operations.
The SpiceJet engineering staff have been protesting across the country, demanding the reinstatement of their salaries and other benefits. However, the protests have now ended after the management assured them that their issues will be looked into by next week, sources tell ET. “We were assured that our demands will be addressed by November 8, 2021, and all of us have returned back to work,” an employee said.
Analysts have also highlighted the company's stretched liquidity amid volatile aviation turbine fuel (ATF) prices & forex rates. While the company is yet to release its Q2FY22 numbers, it reported a net loss of Rs 729 crore in Q1FY22 (Vs Rs 593 crore in Q1FY21) and net operating revenue of Rs 1,090 crore (Vs Rs 515 crore in Q1FY21).
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