The net worth of full-fare airline Jet Airways has turned negative after the company posted a ₹1,040-crore loss in the fourth quarter ended March 31.
“The company has incurred a loss during the year and has negative net worth as at March 31, 2018 that may create uncertainities. However, various initiatives undertaken by the company in relation to saving costs, optimising revenue management opportunities and enhancing ancillary revenues are expected to result in improved operating performance,” Jet Airways said in a filing with the BSE.
“Further, our continued thrust to improve operational efficiency and initiatives to raise funds are expected to result in sustainable cash-flows addressing any uncertainties. Accordingly, the statement of financial results continues to be prepared on a going concern basis, which contemplates realisation of assets and settlement of liabilities in the normal course of business including financial support to its subsidiaries,” the statement said.
‘Future at stake’
The company’s independent auditor, DTS & Associates, has pointed out that if Jet Airways is unable to raise funds, the future of the company is at stake because of the negative net worth.
In the quarter ended March 31, Jet Airways reported a net loss of ₹1,040 crore against a profit of ₹583 crore in the year-ago period due to increase in fuel prices and rupee depreciation. The airline also booked a one-time maintenance charge of ₹253 crore.
The company’s total current liabilities ballooned to ₹14,505 crore as of March 31 from ₹11,934 crore a year earlier.
Jet Airways has been issued a ‘BBB’ credit rating by ICRA for the NCDs issued by the company. In a note to the BSE, the company said that Jet Airways’ loans to its subsidiary Jet Lite have a negative net worth as of March 31.
Jet Lite merger off
Jet Airways announced in a BSE filing that it could not get the Civil Aviation Ministry’s approval for the merger of Jet Lite with itself, nearly three years after the proposal was announced by the full-service carrier. Consequently, the merger scheme stands revoked and cancelled, it added.
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