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Franklin receives Rs 13,130 crore in 6 shut schemes; Short Term Income Plan turns cash positive


Franklin Templeton Mutual Fund has informed its investors that the six wound up schemes have received Rs 13,130 crore as on December 31, 2020. This cash has come to these schemes since April, 2020, from maturities, pre-payments, and coupons. In the month of December 2020, the schemes mobilized Rs 1,543 crore.

Sanjay Sapre, President, Franklin Templeton India, informed in his letter to investors that Franklin India Short Term Income Plan has also turned cash positive taking the total number of cash positive schemes to five. Sapre said that these schemes have Rs 8,527 crore available to return to the unitholders, subject to fund running expenses. He also added that the inflows received across six schemes are nearly 41% higher than anticipated in the maturity profile published for April 23, 2020.

Informing about the borrowing level in Franklin India Income Opportunities fund, Sapre informed that the fund borrowing level in the scheme has steadily come down from 37.55% on April 24, 2020 to 6% at the end of December, 2020.

Sapre also informed that of the Rs 13,120 crore received since April 24, 2020, slightly more than half of this amount has been received from securities rated “A”, followed by securities rated “AA”. Much of this cash has been generated from securities which were unlisted, or where FT was a majority holder – nearly 29% of the cash is from unlisted securities and nearly 74% of the cash is from securities where the schemes are the sole or majority holders.

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“I would like to inform you that, most importantly, all of this cash has been received without any secondary market sale (active monetization) of the securities in the six schemes. This means that the securities held in the funds can be monetized at fair value if given appropriate time under normal market conditions,” Sanjay Sapre said in the letter.

Speaking about the e-voting process that took place from December 26-28, Sapre said that the result of the e-voting along with the report of the observer will be submitted to the Supreme Court in a sealed envelope. He said that further steps will be taken as per the directions of the Supreme Court. The next hearing in this matter is expected to be held in the 3rd week of January 2021.





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