Companies

Franklin Templeton investors to get ₹2,000 cr next month

Suresh P Iyengar Mumbai | Updated on April 26, 2021

The six suspended debt schemes of Franklin Templeton have received ₹1,536 crore from maturities, coupons, sale of asset and prepayments in the fortnight ended April 15

Franklin Templeton is preparing to distribute the third tranche of payment of over ₹2,000 crore early next month. Inflows into the schemes have started increasing with the Supreme Court-appointed liquidator, SBI Funds Management, starting to sell the assets held in the six suspended debt funds.

Investors in Franklin Templeton Ultra Short Bond, Dynamic Bond and Income Opportunity funds will receive about ₹2,000 crore by the end of this month, sources said.

Other three schemes

Cash will be distributed in the other three debt schemes also if they receive an inflow of over 10 per cent, he added.

Without getting into the specifics of how much money will be distributed, DP Singh, Chief Business Officer, SBI Mutual Fund, said the fund house is in the process of liquidating the assets held by the six suspended Franklin Templeton and hopes to finish much of the sale by the end of this year.

“We will ensure that investors interest remain paramount while taking any sale decision and will not resort to fire sale. We will find suitable takers for long dated papers at a reasonable value,” he added.

So far, Franklin Templeton, through SBI Mutual Fund, has distributed ₹12,084 crore in two tranches since the six funds were suspended for trading last April.

The six suspended debt schemes of Franklin Templeton have received ₹1,536 crore from maturities, coupons, sale of asset and prepayments in the fortnight ended April 15, taking the overall inflow to ₹17,312 crore.

Standard procedure

Earlier, SBI Funds had submitted a standard operating procedure for sale of assets in the debt schemes. This was approved by the Supreme Court.

The asset under management in the six debt schemes were ₹25,000 crore when Franklin Templeton decided to suspend trading and wind up the schemes due to unprecedented redemption amid the early days of Covid outbreak last April. The fund house could not liquidate the assets of the schemes as the bond market disrupted by various sops provided by the RBI.

The decision to wind up schemes ran into trouble with panicked investors filing petition in the courts seeking justice. The Supreme Court finally appointed SBI Funds Management to distribute the inflow from investment and sell the asset held by the schemes.

Published on April 25, 2021

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