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Adding to the woes of Franklin Templeton, a Future Group company, Rivaaz Trade Ventures, defaulted on its debt obligation due on Monday.
The investments made through four debt schemes of the fund house have been valued at zero, per norms of the Association of Mutual Funds in India. Accordingly, the fund house said the net asset value of the four schemes will be down to the extent of the default.
The four impacted funds are among the six debt funds that have been suspended and are in process of being wound up.
Franklin India Income Opportunities has the highest exposure of 6 per cent of its AUM to Rivaaz Trade Ventures while the Short Term Income Plan has 5 per cent exposure. The Dynamic Accrual and Credit Risk funds have 3 per cent and 0.33 per cent investments in Rivaaz, respectively.
Earlier, Franklin’s investments in the debt papers of other Future Group companies, Nufuture Digital (India) and Future Ideas Company, were valued at zero after they defaulted on payment obligation.
The valuation only reflects the realiseable value as on the date of valuation and does not indicate any reduction or write-off of the amount repayable by Rivaaz to the schemes, said the fund house.
Reliance Retail has acquired the retail, wholesale, logistics and warehousing businesses of the Future group, on a slump sale basis for ₹24,713 crore. Based on representations received from the Future Group, non-convertible debentures held by Franklin Templeton are proposed to be repaid from the proceeds of the transaction, said the fund house.
“We believe, the proposed sale announcement is a positive development for the NCDs held by schemes of Franklin Templeton. We are closely tracking developments around the same,” it added.
Investors of Franklin Templeton have a filed petition against the abrupt suspension of the six debt schemes and the case is now being heard by the Karnataka High Court.
Meanwhile, the six suspended debt schemes have received ₹4,988 crore as of mid-August.
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