Embattled Franklin Templeton has agreed to extend full co-operation to SBI Mutual Fund to distribute the surplus cash of ₹9,122 crore in the five of the six debt schemes that being wound up completely.
The Supreme Court has directed that SBI Mutual Fund been trusted with the activity of distributing available cash of ₹9,122 crore to unit holders in proportion to their holdings in the schemes under winding up. The next hearing in this matter is scheduled for February 9.
The combined AUM of the six schemes has increased from ₹25,648 crore on April 23, 2020 to ₹26,414 crore as on January 29, said Sanjay Sapre, President, Franklin Templeton Asset Management (India).
“I would like to assure you,that we will provide all assistance SBI Mutual Fund may require to ensure distribution of available cash at the earliest,” he said.
“The decision to voluntarily wind up six schemes was one of the most difficult decisions the organisation, our Trustees and Directors. I wish to emphasize that this decision was taken with the sole objective of safeguarding value for our investors,” he said.
The fund house went ahead with the difficult decision of winding up these six schemes because of the firm belief that this was the right decision to preserve value for investors and this is evidenced by the cash generated in these schemes over the last 9 months, he said.
Since last April to this January-end, the six schemes under winding up have received ₹14,391 crore from maturities, pre-payments, and coupons. Some of this cash has been used to repay borrowings.
The inflows received across six schemes are nearly 46 per cent higher than anticipated in the maturity profile published last April. The borrowing level in Franklin India Income Opportunities fund, the only fund with outstanding borrowing, has steadily come down from 38 per cent last April to 5 per cent as January end. The net asset value of Franklin India Income Opportunities Fund is only marginally lower that what it was before Covid-19 crisis.