6 Franklin Templeton debt funds collect Rs 602 cr in Jan 16-29 period
Five cash-positive can immediately return Rs 9,770 cr if Supreme Court allows
The six debt funds proposed to be wound up by Franklin Templeton MF have collected Rs 602 crore in Jan. 16 to 29 period, almost 10% less than Rs 669 crore collected in the previous fortnight.
Over the latest fortnight (January 16 – 29), these schemes received Rs 350 crore as pre-payments.
The 6 schemes have received total cash flows of Rs 14,391 crore till January 29, 2021 from maturities, coupons and prepayments.
The total number of cash positive schemes stands at five. These schemes have Rs 9,770 crore cash available to return to unitholders, subject to fund running expenses. The balance Rs 4,621 crore has been used to repay borrowings and interest thereon of the six schemes.
Individually, Franklin India Low Duration Fund, Franklin India Ultra Short Bond Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund and Franklin India Short Term Income Plan have 65%, 53%, 41%, 27% and 11% of their respective AUM in cash.
Borrowing levels in Franklin India Income Opportunities Fund continue to come down steadily and currently stands at 5% of AUM (assets under management). The scheme will return monies to investors after paying all the obligations/ liabilities towards borrowings/ expenses/provisions, if any, once the Supreme Court gives the nod. Currently the court is hearing the matter regarding the winding up of schemes.
The total AUM of the 6 schemes stands at Rs 26,412 crore at present.
Already Franklin MF’s winding-up proposal has been approved by an “overwhelming majority of over 96 per cent unit-holders” in the recent e-voting.
The matter is being heard in the Supreme Court now. If the top court allows, lakhs of investors who hold units in 5 of the 6 debt schemes will get some money back which have been stuck for nearly a year.
In April last year, Franklin shut down subscriptions and redemptions while proposing to wind up the six debt schemes citing Covid-induced illiquidity in credit markets.