Franklin debt schemes collect Rs 1,213 cr in Dec 16-31; 5th scheme turns cash-positive
Total collection reach Rs 13,120 cr as of December 31; Redemptions continue to be suspended till the date of the next court hearing .
Fortnightly collections of the 6 debt funds proposed to be wound up by Franklin Templeton MF almost quadrupled to Rs 1213 crore in Dec. 16 to 31 period, from Rs 330 crore in Nov. 28 to Dec. 15 phase.
So far, the 6 schemes received total cash flows of Rs 13,120 crore as of December 31, 2020 from maturities, pre-payments and coupon payments.
Franklin India Short Term Income Plan (FISTIP) is the latest scheme to turn cash positive. The total cash available for the five cash positive schemes stands at Rs 8,527 crore, subject to fund running expenses. The total cash available with 5 schemes is lower than total cash flows because a portion was used to retire debt that the funds were forced to take in a bid to honour redemptions.
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 52%, 49%, 41%, 23% and 8% of their respective AUM in cash.
Borrowing levels in Franklin India Income Opportunities Fund continue to come down steadily and currently stands at 6% of its AUM.
Please note that the Hon’ble Supreme Court permitted the Trustee of Franklin Templeton Mutual Fund to seek consent of the unitholders for the winding up of the six schemes under Regulation 18(15)(c) of SEBI (Mutual Funds) Regulations, 1996.
Accordingly, the Trustee conducted the e-voting for the same from 26-28 December 2020 followed by a unitholder meet on 29 December 2020. As directed by the Apex Court, redemptions in these schemes will continue to be suspended till the date of the next hearing scheduled in the third week of January 2021.
As per the directions of the Hon’ble Supreme Court, on December 18, 2020, SEBI appointed T. S. Krishnamurthy, former Chief Election Commissioner of India, as observer for the e-voting taking place on December 26-28,2020 and ‘Unitholders’ meetings’ scheduled on December 29, 2020, for the six schemes under winding up.