Franklin Templeton gets ₹700 cr more in 6 suspended debt funds

Suresh P Iyengar Mumbai | Updated on August 17, 2020

The six suspended debt schemes of Franklin Templeton have received ₹708 crore from maturities, pre-payments and coupon payments in last two weeks. In all, the schemes have received ₹4,988 crore since they were suspended on April 24.

Two of the six schemes – Franklin India Ultra Short Bond Fund and Dynamic Accrual Fund – have 21 per cent and 12 per cent of their AUM available in cash to distribute to unitholders, subject to a successful unitholder vote, said the fund house on Monday.

Moreover, borrowings in Franklin India Low Duration and Credit Risk Fund have dropped down below five per cent and will become cash positive soon even while outstanding borrowing in the other funds continue to decline, it added.

Meanwhile, the e-voting and unitholders meet to seek permission for sale of assets and distribution of proceeds to investors remain suspended till further directions from Karnataka High Court, said the fund house.

Getting investors approval is crucial as active monetisation of assets of the schemes and distribution of investment proceeds to the unitholders will be possible only after successful e-voting, it said.

Franklin Templeton had decided to close down the schemes as it could not meet the redemption pressure from the investors. The six debt schemes had asset under management of ₹25,000 crore before they were suspended on April 24.

Investors had filed petition against winding up of the schemes in different High Courts but the Supreme Court had directed Karnataka High Court to decide on the matter within three months.

Published on August 17, 2020

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