Rivaaz Trade Ventures (RTV), a Future Group entity, has defaulted on its debt repayment obligation, impacting four schemes of Franklin Templeton Mutual Fund (Franklin MF).
Among the four schemes, Income Opportunities Fund had the highest exposure to RTV papers at 6.32 per cent of its assets under management, followed by Short Term Income Plan (5.02 per cent), India Dynamic Accrual Fund (3.02 per cent), and Credit Risk Fund (0.33 per cent).
These four schemes are part of the six schemes that were wound up by the fund house in April.
“Due to default in payment, the securities of RTV will be valued at zero, basis AMFI standard hair cut matrix. Accordingly, this would be reflected in the NAV movement for August 31, 2020," the fund house said in a note to investors. “This valuation only reflects the realisable value on the date of valuation and does not indicate any reduction or write-off of the amount repayable by RTV to the schemes,” it further said.
Earlier, two other Future Group entities — Nufuture Digital and Future Ideas Company — had defaulted on the payment obligation.
Franklin is hopeful that Future Group will be able to repay all pending dues following its deal with Reliance Industries (RIL).
“Based on the representation received from Future Group, we understand non-convertible debentures (NCDs) held by Franklin Templeton MF are proposed to be repaid from proceeds of the transaction… We believe the proposed sale announcement is a positive development for the NCDs held by schemes. We are closely tracking developments around the same,” the note said.
On August 29, RIL arm Reliance Retail announced the acquisition of various businesses of Future Group on a slump sale basis for an aggregate sum of Rs 24,713 crore.