Franklin’s shut schemes get Rs 11,907 cr since winding up

The six shuttered debt schemes of Franklin Templeton Mutual Fund have received cash flows of Rs 11,907 crore from maturities, pre-payments and coupon payments since its winding up in April this year. Between November 28 and December 15, the six schemes received Rs 330 crore, of which Rs 118 crore was as pre-payments, the fund house said on Thursday.

The cash available as of December 15, 2020 stands at Rs 7,488 crore for the four cash positive schemes, subject to fund running expenses.

Individually, Franklin India Low Duration Fund, Franklin India Ultra Short Bond Fund, Franklin India Dynamic Accrual Fund and Franklin India Credit Risk Fund have 49%, 48%, 34% and 16% of their respective assets under management (AUM) in cash.

Borrowing levels in Franklin India Short Term Income Plan and Franklin India Income Opportunities Fund continue to come down steadily and currently stands at 1% and 16% of their respective AUM.

The 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.

The Trustee has issued a notice dated 6 December 2020 for seeking consent of unitholders. 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 the Covid-19 pandemic.

“The e-voting for the same will be held from 26-28 December 2020 followed by a unitholder meet on 29 December 2020.

“Redemptions will continue to be suspended till the date of the next hearing scheduled in the third week of January 2021.

“We believe that the order issued by the Hon’ble Supreme Court will be helpful in ensuring orderly monetisation and distribution of scheme assets,” said the fund in a note.