Shares of cash-strapped airline Jet Airways fell as much as 5.63 per cent to Rs 265 apiece in the intra-day deals on Wednesday after the company defaulted on the debt payments to banks.
In a BSE filing, Jet Airways said, "the payment of interest and principal installment due to the consortium of Indian Banks (led by State Bank of India) on 31st December 2018 has been delayed due to temporary cashflow mismatch and the company has engaged with them in relation to the same."
Following this, ratings firm ICRA downgraded rating to 'D' from 'C'. The short term rating has been revised to D from A four.
"This rating downgrade considers the delay by the Company in the payment of interest and principal installment due on 31 December, 2018 due to cash flow mismatches and delays in the implementation of proposed liquidity initiatives by the company," ICRA said.
The 25-year-old airline is facing financial difficulties and owes money to pilots, lessors and vendors. Intense pricing competition, a weak rupee and rising fuel costs weighed on Indian airlines in 2018.
Jet and its second-largest shareholder Etihad Airways are in talks with bankers on a rescue deal that may involve the Abu Dhabi-based airline increasing its stake from 24 per cent.
At 01:06 am, shares of the company were trading at Rs 265.50 apiece on BSE, down over five and a half per cent.