Comments
Franklin Templeton has assured investors that they will start getting money as soon as it receives approval for winding up the six debt schemes.
The fund house plans to start the process of seeking investor approval through e-voting soon.
In a note to investors Sanjay Sapre, President, Franklin Templeton Aset Management (India), said the fund house seeks consent for the orderly winding up and believe this will result in the best possible outcomes for unitholders under the current circumstances.
“I would like to assure that would also like to assure you, that voting for an orderly winding up does not mean a lengthy wait for return of monies,” he said and added in normal market conditions, the opportunity to liquidate assets at fair value will increase with time.
“After first round of voting, we will immediately proceed with a second vote to seek approval of the unitholders as required under regulation 41 of SEBI (Mutual Fund) Regulation 1996 to authorise the Trustee, or any other person, to proceed with the winding up of the schemes,” he said.
The e-voting under regulation 41, gives the time needed to monetise scheme assets without resorting to distress sales and thus gives an opportunity to the scheme to return maximum value to unitholders, he added.
Fund distribution
The fund house would then be able to distribute the cash already available in the schemes and make further payments at regular intervals as the schemes monetize assets and receive cash-flows.
If voted “No” against the orderly winding up, the funds will be required to re-open for purchases and redemptions. The schemes may suffer significant losses due to the need to sell securities at distress prices to fund heightened redemption volumes, he added.
As of November-end, the schemes under winding up have received over ₹11,576 crore from maturities, pre-payments, and coupons.
Even though the schemes could not actively monetise the portfolio, the cash available for disbursement as on November end stands at ₹7,226 crore for these four schemes, subject to fund running expenses.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.