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Franklin Templeton gets unit holders' nod for closure of 6 debt schemes

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The fund house had announced in April 2020 to shut the funds due to unfavourable conditions in the bond market due to the Covid-19 pandemic

Franklin Templeton gets unit holders' nod for closure of 6 debt schemes
Franklin Templeton Mutual Funds has received a nod from over 90 percent of unit holders to close the six suspended debt funds, a court-appointed observer told the Supreme Court on Monday.
The voting results indicate that FT would not be required to resort to selling its underlying assets.

The report by T.S. Krishnamurthy, who was the observer for e-voting process, mentioned that more than 96 percent unit holders were in favour of winding down the six debt schemes.

The e-voting process had taken place during December 26-28.
A Franklin Templeton spokesperson said: "We are thankful to our unit-holders 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 Supreme Court in the next hearing scheduled to be held on 25 January 2021."
The fund house had announced in April 2020 to shut the funds due to unfavourable conditions in the bond market due to the Covid-19 pandemic
Last month the Supreme Court had directed the fund house to seek the consent of the unit holders over the winding up of the schemes in a week.
The six concerned debt schemes are Franklin India Low Duration Fund, Dynamic Accrual Fund, Credit Risk Fund, Short Term Income Plan, Ultra Short Bond Fund and Income Opportunities Fund.
On Sunday, Franklin Templeton said that it has have received cash flows of Rs 13,789 crore since winding up in April, 2020 till January 15, 2021.
According to the fund house, during January 1-15, these schemes received Rs 669 crore, of which Rs 617 crore was as pre-payments.
Further, the cash available as of January 15, 2021 stands at Rs 9,190 crore for the five cash positive schemes, subject to fund running expenses.
Individually, Franklin India Low Duration Fund, Franklin India Ultra Short Bond Fund, Dynamic Accrual Fund, Credit Risk Fund and Short Term Income Plan have 63 per cent, 50 per cent, 41 per cent, 26 per cent and nine per cent of their respective assets under management in cash, Franklin Templeton said in a statement.
Borrowing levels in Franklin India Income Opportunities Fund continue to come down steadily and currently stand at six per cent of AUM, it had said.
 
(With inputs from IANS)