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Franklin Templeton debt investors to get Rs 2,962 crore

Suresh P Iyengar Mumbai | Updated on April 11, 2021

Investors in six debt schemes to receive the second tranche from Monday

Franklin Templeton will distribute another Rs 2,962 crore to the investors across six suspended debt schemes next week.

This is the second tranche of fund distribution after these schemes were first suspended from trading last April.

Investors in Franklin Templeton Ultra Short Bond and Short Term Income funds will receive Rs 1,489 crore and and Rs 710 while Credit Risk and Dynamic Accrual fund investors will get Rs 320 crore and Rs 181 crore. Franklin Templeton India Low Duration and Income Opportunities funds will distribute Rs 141 crore and Rs 121 crore to investors.

The payment to investors whose accounts are KYC compliant will be made during the week of April 12, said a spokesperson of the fund house.

The units held by investors in the debt scheme will reduce to that extent after receiving funds from the fund house, he added.

As mandated by the Supreme Court, the fund house through SBI Mutual Fund had distributed Rs 9,122 crore across five schemes in February. One of the scheme then had an outstanding debt and it was repaid before distributing the surplus to investors.

This apart, the Supreme Court has taken note of the Standard Operating Procedure finalized by SBI Mutual Fund to monetise assets in the six debt schemes and distribute the proceeds to unitholders.

As of March-end, the six debt schemes have received Rs 15,776 crore from maturities, coupons, sale and prepayments ever since the schemes were abruptly suspended last April.

After paying of the outstanding loans and first tranche of fund distribution, the schemes have Rs 1,874 crore for distribution to investors.

In the fortnight ended March 31, the six schemes received cash flows of Rs 505 crore.

All the six schemes had an asset under management of Rs 25,000 crore when they were suspended due to relentless redemption last April amid Covid pandemic breakout.

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 various High Courts and then the Supreme Court which appointed SBI Mutual Fund to distribute the surplus cash to investors and sell the assets held in the schemes.

Published on April 11, 2021

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