Troubled Franklin Templeton India has received ₹149 crore as interest on its investment in Vodafone Idea. Of the six debt schemes of the fund house, which are in the process of closed down, five schemes – Franklin India Low Duration, Short Term Income Plan, Credit Risk Fund, Dynamic Accrual and Income Opportunities funds – had invested ₹1,250 crore in the telecom company.
Following the current inflow, investors in Short Term Income Plan will get ₹62 crore, while Low Duration and Income Opportunity would distribute ₹18 crore and ₹17 crore, respectively. Credit Risk and Dynamic Accrual investors will receive ₹40 crore and ₹11 crore, respectively.
Segregated portfolio
However, Franklin Templeton had segregated exposure to Vodafone Idea in January last year due to a Supreme Court ruling on the teleco’s liabilities. The amount received as interest will be distributed among the investors holding the segregated portfolio.
The payout will be processed by extinguishing proportionate units in the plans of the segregated portfolio of respective schemes. After the payment, the number of units outstanding in the investor account would fall to the extent of payout and statutory levy.
The debt paper of Vodafone has a provision for “interest rate reset” which fall this month. The fund house will start negotiation with the borrower for adjusting the interest rate mostly for higher percentage points given the risk associated with the borrower, sources said. The debt papers are maturing in 2023.
The fund house had received ₹146 crore as interest last September.