ICRA has downgraded the debt-laden Jet Airways again. This is the fourth time that the ratings have been downgraded in less than two years.

ICRA in its report mentioned that the rating was downgraded considering delays in the implementation of the proposed liquidity initiatives by the management, further aggravating its liquidity, as reflected in the delays in employee salary payments and lease rental payments to the aircraft lessors.

Stating the company’s losses for the past couple of quarters, the agency stated that the company has large debt repayments due over the next four months (December-March) of FY2019 (Rs. 1,700 crore), FY2020 (Rs. 2,444.5 crore) and FY2021 (Rs. 2,167.9 crore). The company is undertaking various liquidity initiatives, which includes, among others, equity infusion and a stake sale in Jet Privilege Private Limited(JPPL), and the timely implementation of these initiatives is a key rating sensitivity.

The downgrade came despite hopes of revival at the airline after the private carrier announced a slew of cost-cutting measures and plan to sell stake in its frequent flyer programme along with the company’s CEO, Vinay Dube assuring the discussions with several investors for a stake in the company. Despite its worst-ever performance in the first quarter, Jet Airways stock saw a revival as investors seemed convinced with the company’s plan of action. However, after ICRA’s release of the report, Jet Airways’ stocks saw a drop. The company’s stocks were at Rs 285 at the time of opening bell, however, during the day, it hit a low of Rs 271.55 however, the stocks regained by Rs 4 and closed at Rs 276.20.

According to the report, as on September30, 2018, the company had gross debt of Rs.8,411 crore, as against Rs. 8,403crore as on March 31, 2018. This is despite the receipt of lease incentives during June 2018and advances from JPPL in October 2018.

Stating about the forecast of 2019-2021, ICRA added, “The company has repayments of Rs. 1,700crore due in the next four months (December-March) ofFY2019, Rs. 2,444.5crore in FY2020and Rs. 2,167.9crore in FY2021. In the absence of adequate cash accruals, the company requires refinancing its repayments falling due. While the company has been undertaking several liquidity initiatives, timely funds tie-up is a key rating sensitivity.”