Adilink Infra default forces Aditya Birla SL Mutual Fund to segregate 3 debt schemes' portfolios

Aditya Birla Sun Life Mutual Fund will segregate portfolios in three of its debt mutual fund schemes because of a default in payment by Adilink Infra and Multilink Trading. Aditya Birla SL Mutual Fund holds debentures worth Rs 787 crore in papers of Adlink Infra and Multilink Trading.

Aditya Birla Sun Life Medium Term Plan has 7.5%, Aditya Birla Sun Life Credit Risk Fund has 3.7%, and Aditya Birla Sun Life Dynamic Bond Fund has 5.6% exposure to Adlink papers in their portfolios.

In a note to investors, the fund house said, “On 25th Nov 2019, payments from Adilink were due to the minority investor as the minority investor had exercised a put option available to them. It has come to our knowledge that the issuer has not repaid the minority investor today. We have taken this as a credit event and propose to create segregated portfolios for the Adilink exposure.”

The fund house pointed out that repayment of the Adilink NCDs is expected to be done through the monetisation of the road assets which are pledged to it as security. Given that these are unlisted infrastructure assets, the sale process is a little longer drawn due to negotiation and finalization of all commercials, documentation as well as authority approvals, the fund house said.

“There are a few potential investors who are actively evaluating these road assets in parallel. We are looking to realize the best value for the entire portfolio of road assets (which include toll and annuity assets) and currently, the process is at different stages with different investors. Base case valuations done through reputed third-party vendors indicate that when the monetisation process is successfully completed for the portfolio, the entire exposure can be taken out. We are exploring all options to realize dues as soon as possible,” the fund house said.


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