Tuesday, November 02, 2021

SpiceJet ratings withdrawn by CRISIL; company placed under 'non-cooperative' category

Crisil Ratings has withdrawn its 'CRISIL D' credit ratings the low-cost carrier SpiceJet after the company did not provide information essential to take a forward-looking view on the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.

Meanwhile, Spicejet said the carrier had already advised Crisil on July 13, 2020 about its intention to work with alternate rating agency to grade its investments, debt instruments and financing facility going forward.

" The company has already obtained revised credit ratings from Acute Ratings and Research Limited for its Loans/Debt instruments in August 2021 which were upgraded from previous “D” rating assigned to the Company last year," the carrier said.

02/11/21 Anand JC/Economic Times

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