Jet Airways defaults on loan repayment; shares slump 5 pc

Crisis-hit Jet Airways has defaulted on repayment of loans to a consortium of Indian banks, according to a filing.

Shares of the airline tumbled 5 per cent to Rs 267 in afternoon trade on the BSE on Wednesday.

The full service carrier, which has been grappling with financial woes for some time now, has been making delayed salary payments to its staff.

"Payment of interest and principal installment due to the consortium of Indian Banks (led by State Bank of India) on December 31, 2018 has been delayed due to temporary cashflow mismatch," the airline said in a filing to the stock exchanges late Tuesday.

The airline, which is also looking to raise fresh funds, said it has engaged with them (banks) in relation to the loan repayments.

The SBI is already carrying out a forensic audit of Jet Airways for alleged irregularities.

The carrier has posted three consecutive quarterly losses of over Rs 1,000 crore each since March 2018.

Rating agency Icra Wednesday downgraded its ratings on the airline's long-term and short-term fund facilities.

"There have been delays in the implementation of the proposed liquidity initiatives by the management, which have aggravated its liquidity. The company has already been delaying its employee salary payments and lease rental payments to the aircraft lessors," Icra said in a note.

Further, the rating agency said that Jet Airways has "large debt repayments due over December 2018 to March 2019 (Rs 1,700 crore), FY 2020 (Rs 2,444.5 crore) and FY 2021 (Rs 2,167.9 crore)".

On Sunday, a source said that Jet Airways was in discussions with the SBI for raising Rs 1,500 crore short-term loan to meet its working capital requirement and some payment obligations.