CRISIL withdraws SpiceJet's rating; puts company in non-cooperating category

A SpiceJet aircraft | Representative image

Crisil Ratings has withdrawn its 'Crisil D' credit rating for SpiceJet Ltd stating that the airline has not provided it with adequate information to carry out a rating review, the international rating agency said in a press release.

"Crisil Ratings is yet to receive adequate information from SpiceJet Limited (SpiceJet) to enable it to undertake a rating review. Crisil Ratings is taking all possible efforts to get the rated entity to cooperate with its rating process to enable it to carry out the rating review," the rating agency said.

In a statement to Moneycontrol, Spicejet has now clarified that it is no longer working with Crisil Ratings and hence is not obliged to provide any information. The rating agency currently reviewing Spicejet is Acute Ratings and Research Limited, whose rating has been accepted by the company's bank/lenders.

"The present ratings of the Company for its Bank Loan/Debt Instruments are- Long Term Instruments: BB- with stable outlook; Short Term Instruments: A4+. 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. 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", read the statement.

Earlier in October Crisil Ratings had 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-’.

The earlier downgrade by Crisil was because of SpiceJet's deteriorating liquidity profile which was reflected in invocation of standby letter of credit, which remained unpaid for more than 30 days as on June 29, 2020, the rating agency had said.

"SpiceJet’s liquidity deteriorated because of disruption in operations,” CRISIL said.

The withdrawal of rating comes on the same day when the engineering staff of SpiceJet staged protests across the country demanding restoration of salaries and other benefits.

Employees of SpiceJet across Delhi, Ahmedabad, Mumbai, Bengaluru, Kolkata, Cochin, Hyderabad, Patna, and Pune were protesting for the restoration of salaries and other benefits on November 1.

While SpiceJet had said that its flight operations remained normal, the staff of the airline told Moneycontrol that they did not attend work for at least a couple of hours in Delhi airport.