Sanjay Sapre says 96% votes in favour of Franklin Templeton's winding up

In a letter to the unitholders of the six shut debt mutual fund schemes, Sanjay Sapre, President, Franklin Templeton India, thanked the unitholders. Sapre said that out of the total number of unitholders who cast their votes, over 96% of unitholders have voted in favour of the winding up of the six schemes.

Following are the scheme wise results:

Source: Franklin Templeton MFET Online

“We are thankful to our unitholders for voting overwhelmingly in favour of the orderly winding up in all 6 schemes. We deeply appreciate the support of our investors and partners and hope to commence distribution of investment proceeds at the earliest, subject to the directions of the Hon’ble Supreme Court. The next hearing in this matter is scheduled to take place on January 25, 2021,” Sapre said in the letter.

From April 24, 2020 to January 15, 2021, the six schemes under winding up have received Rs 13,789 crore from maturities, pre-payments, and coupons. Over the latest fortnight (January 1 – 15), the schemes received Rs 669 crore, of which Rs 617 crore was received as pre-payments.

Speaking about the shut schemes, Sapre said that five of the six schemes are now cash positive and the borrowing levels in Franklin India Income Opportunities Fund has come down considerably. “Franklin India Short Term Income Plan turned cash positive recently taking the total number of cash positive schemes to five. The five cash positive schemes have Rs 9,190 crore available to return to unitholders as on January 15, subject to fund running expenses. Borrowing levels in Franklin India Income Opportunities Fund continue to come down steadily and currently stand at 6% of AUM,” Sanjay Sapre said.

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The letter also mentioned that the inflows received across 6 schemes are nearly 41% higher than anticipated in the maturity profile published for April 23, 2020. Sapre informed that all of this cash has been received without any secondary market sale (active monetization) of the securities in the six schemes. This points to the fact that the securities held in the funds can be monetized at fair value if given appropriate time under normal market conditions.



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