Six debt schemes can realise more if given enough time, says FT chief

Suresh P Iyengar | Updated on January 19, 2021

The debt schemes have managed to receive ₹13,789 crore from investments

After receiving investors’ approval for closure of its six debt schemes, Franklin Templeton (FT) has said it has managed to receive ₹13,789 crore from its investments and can realise more if given enough time.

Sanjay Sapre, President, Franklin Templeton Asset Management (India), said all of the cash in the debt schemes have been received without any secondary market sale (active monetisation) of the securities.

This points to the fact that the securities held in the funds can be monetised at fair value if given appropriate time under normal market conditions, he said.

The Supreme Court in its next hearing on January 25 will take a call on distribution of net ₹9,190 crore (after providing for expenses) accumulated in the five cash positive debt schemes and liquidation of assets in the schemes.

It will be pertinent to note that ₹13,789 crore received since last April, slightly more than half of this amount has been received from securities rated ‘ A’, followed by securities rated ‘AA’. Much of this cash has been generated from securities which were unlisted or where FT was a majority holder, he said.

The inflows received across six schemes is nearly 41 per cent higher than anticipated in the maturity profile published last April.

Over the latest fortnight, the schemes received ₹669 crore and of this ₹617 crore was received as pre-payments, he added.

Thanking unit-holders for voting in favour of the orderly winding up in all six debt schemes, Sapre said the fund house hopes to commence distribution of investment proceeds at the earliest, subject to the directions of the Supreme Court.

As directed by the apex court, the Trustee of Franklin Templeton Mutual Fund, had sought the consent of the unitholders to wind up the schemes through e-voting on December 26 to 28 and followed it with the unitholders meet via video conference on December 29. The result of the e-voting was announced by the Supreme Court on Monday. Out of the total number of unit-holders who cast their votes, over 96 per cent of unit-holders have voted in favour of the winding up of the six schemes.

Published on January 19, 2021

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