Jet Airways stock plunges over 5% as airline defaults on loan repayment to banks

The Jet Airways stock fell in trade today after the crisis-hit firm said it had defaulted on loan repayment to banks.

The small cap stock fell up to 5.71% to 265 level compared to the previous close of 281 on Tuesday. The stock opened with a loss of 2.51% at 274 level on the BSE.

The Jet Airways stock has lost 68% during the last one year. At 2:40 pm, the stock was trading 4.71% lower at 267 level.

The stock is trading below its 50-day and 200-day moving averages 281.23 and 277.14 on the BSE. The stock has fallen after five days of consecutive gains.

The full service carrier has been grappling with financial woes for quite some time now and has been making delayed salary payments to 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 company said in a regulatory filing.

The company has engaged with them (banks) in relation to the same, Jet Airways added.

The deadline for payment was Monday, December 31.

ICRA cut Jet's long- and short-term ratings on Wednesday, citing the payment delays.

Timely implementation of liquidity initiatives, including equity infusion and a stake sale in the airline's loyalty programme Jet Privilege, will be critical to the company's credit profile, ICRA said.

Jet, India's biggest full-service carrier by market share, had a debt of Rs 8,052 crore ($1.15 billion) as of September 30, 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 percent at present.

Meanwhile, the Sensex fell 300 points to 35973 and Nifty lost 100 points to 10,804. Of 30 Sensex stocks, 24 were trading in the red.

Edited by Aseem Thapliyal