Big development of the day: Jet Airways has defaulted on debt repayment
https://www.bloombergquint.com/markets/ ... gs.qxn7eQs
Jet Airways has failed to repay its lenders amid ongoing cash crunch and financial stress. The company said on the exchanges that it has missed payment of interest and principal installment due on Dec. 31, 2018
This development comes as absolutely no surprise to those who understood the actual state of Jet's financials. Now before some elements try to dismiss this as PR spin, you can find the actual filing made by Jet Airways with the exchange herehttps://www.bseindia.com/xml-data/corpf ... 43c417.pdf
A primer on this development
What is a default?
Under Indian banking regulations, a default is when a borrower fails to meet a payment obligation of interest or principal. Even a single day delay in payment of a single rupee is deemed a default.
What happens next?
A loan account that is in default is treated different depending on whether the default is for 30, 60 or 90 days, by when it becomes a NPA (it is unlikely that things will progress this far)
What are the repercussions?
Jet's credit rating will be downgraded to D. Expect a press release from ICRA to this effect by the end of this day. With a rating of D raising additional bank borrowings becomes almost impossible.
What is the way out?
Repay the loans. To do that - raise cash.
India: World's fastest growing major economy. World's fastest growing aviation market.