Franklin’s six halted schemes receive Rs 6,486 crore since April 24

By: |
September 4, 2020 1:00 AM

The cash position in Franklin India Ultra Short Bond Fund and Franklin India Dynamic Accrual Fund rose to 31% and 14% of their respective AUM as of August 31.

On April 23, six debt schemes collectively worth Rs 25,800 crore were wound down by Franklin Templeton MF due to the severe market dislocation and illiquidity caused by Covid-19.On April 23, six debt schemes collectively worth Rs 25,800 crore were wound down by Franklin Templeton MF due to the severe market dislocation and illiquidity caused by Covid-19.

The six shuttered debt schemes of Franklin Templeton Mutual Fund continue to receive cash flows. The fund house has received Rs 1,498 crore from maturities, pre-payments and coupon payments during the period of August 15-31. Between April 24 and August 31, these schemes received Rs 6,486 crore from various debt securities.

The fund house said Franklin India Low Duration Fund and Franklin India Credit Risk Fund are the latest schemes to turn cash positive with 5% and 1% of their respective assets under management (AUM) available in cash to distribute to unitholders subject to a successful unitholder vote.

The cash position in Franklin India Ultra Short Bond Fund and Franklin India Dynamic Accrual Fund rose to 31% and 14% of their respective AUM as of August 31.

On April 23, six debt schemes collectively worth Rs 25,800 crore were wound down by Franklin Templeton MF due to the severe market dislocation and illiquidity caused by Covid-19.

The fund house in a note said, “Please note that the e-voting and unitholders meet continue to remain suspended till we receive further directions from the Karnataka High Court. Active monetization of assets of the schemes and distribution of investment proceeds to unitholders will be possible only after successful e-voting.”

Recently, four of the debt schemes witnessed a fall in their net asset values as Rivaaz Trade Ventures (RTVPL) – a Future Group entity – had defaulted on its scheduled debt obligation due on August 31. Due to the default in payment, the securities of RTVPL was valued at zero based on the Association of Mutual Funds in India (Amfi) standard hair cut metrics.

Franklin India Short Term Income Plan, Franklin India Dynamic Accrual Fund, Franklin India Income Opportunities Fund and Franklin India Credit Risk Fund had invested in various non-convertible debentures issued by RTVPL.

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