Stocks

All six debt schemes of Franklin turn positive

Suresh P Iyengar Mumbai | Updated on April 02, 2021

Suspended debt schemes now have ₹1,874 cr for distribution to investors

All the six schemes of Franklin Templeton that are being wound up have turned cash positive and have received cash flow of ₹15,776 crore from maturities, coupons, sale and prepayments ever since the schemes were abruptly suspended last April.

Cash available for distribution in all schemes now stands at ₹1,874 crore as on March 31.

The fund house with the help of SBI Mutual Fund has distributed ₹9,122 crore till February.

Over the fortnight ended March 31, the six schemes received cash flows of ₹505 crore.

Franklin India Income Opportunities Fund become the last fund to turn cash positive after it repaid the loan of ₹9 crore in the last fortnight of March and now has surplus cash of ₹9 crore for distribution to investors.

The NAVs of all the six schemes were higher as on March-end compared to that of April 23, 2020, when the decision to wind up the schemes was taken.

Surplus cash

Franklin Templeton Ultra Short Bond Fund has the highest surplus cash of ₹1,253 crore for distribution to investors and Short Term Income plan has ₹361 crore while Low Duration and Credit Risk funds have ₹108 crore and ₹100 crore.

Franklin India Dynamic Accrual fund has ₹43 crore for distribution to investors.

Redemption

All the six schemes had an asset under management of ₹25,000 crore when they were suspended due to relentless redemption.

The fund house had to borrow money to meet the redemption as the Covid pandemic dislocated debt market.

Disgusted by the unprecedented decision of Franklin Templeton to suspend the schemes, investors had moved the High Court and then Supreme Court which appointed SBI Mutual Fund to distribute the surplus cash in the schemes and sell the assets held in the schemes.

“Our primary focus over the last several months has been on returning money to unit holders as quickly as possible.

“In this regard, we have directed our efforts to support SBI Funds Management, the liquidator appointed by the Supreme Court, in monetising the portfolios of these schemes and returning money to investors at the earliest, while preserving value,” said Franklin Templeton on Friday.

Published on April 02, 2021

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