CRISIL Ratings withdraws Spicejet rating on 'non-cooperation'

The ratings agency has withdrawn the rating of Spicejet and put it under "non-cooperative" category

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CRISIL Ratings has withdrawn the rating of Spicejet and put it under "non-cooperative" category as the carrier did not provide the requisite information sought by it, the rating agency has said.

SpiceJet on Tuesday said it had informed CRISIL on July 13 about its intention to work with an alternative rating agency to grade its investments, debt instruments and financing facility and therefore, the carrier was not obliged to provide any information to CRISIL.

In a press release dated October 29, 2021, CRISIL Ratings said it has been consistently following up with SpiceJet for obtaining information through letters and emails dated August 18, 2021, September 01, 2021, October 09, 2021 and October 14, 2021 among others, apart from telephonic communication.

"However, the issuer (SpiceJet) has remained non-cooperative," it added.

CRISIL on July 7 downgraded its rating on the Rs 550-crore letter of credit facility of SpiceJet to 'CRISIL D' from 'CRISIL A4' and the rating on the long-term bank facilities to 'CRISIL C' from 'CRISIL B/ Negative'.

"The rating on other short-term facilities have been reaffirmed at 'CRISIL A4'," it had said on July 7.

Clarifying its stand on Tuesday, SpiceJet said it has already obtained revised credit ratings from Acute Ratings and Research Limited for its loans and debt instruments in August this year.

From the "D" rating assigned to SpiceJet last year, the present rating upgraded by Acute stands at "BB- with stable outlook" for long-term instruments and "A4+" for short-term instruments, the carrier stated.

"The company had already advised the previous rating agency (i.e. Crisil) on July 13, 2020 about its intention to work with alternate rating agency to grade our investments, debt instruments and financing facility going forward," SpiceJet said.

"Accordingly, the company is not obliged to provide any further update about the company, as such to the previous rating agency. The new rating agency (i.e. Acute Ratings and Research Limited) has already been accepted by our lenders/banks, which has upgraded our ratings as above," it added.

SpiceJet reported a net loss of Rs 934.8 crore and Rs 998.3 crore in 2019-20 and 2020-21, respectively. It had reported a net loss of Rs 729 crore for the quarter ending June 2021 as its flight operations were affected due to the second wave of the COVID-19 pandemic.