Mumbai: Franklin Templeton has received Rs 148.75 crore in interest from Vodafone Idea. The fund house had written off its exposure to Vodafone Idea in January last year following an adverse Supreme Court ruling on the telco’s liabilities and then liquidated it. A source told Mint that talks are now underway over an interest rate reset clause in Franklin Templeton’s Vodafone Paper.
Overall, Franklin Templeton Mutual Fund has an exposure of around Rs 1,250 crore to the telecom major. The date paper has a provision for “interest rate reset” on 3rd September. It was previously listed as a rest option with a put and call date. However, following an addendum on 16 August, Franklin Templeton omitted the put and call part, citing the implementation of the change made by the appraisal agencies under the guidance of the AMFI Appraisal Committee. Thus it is not clear whether Franklin Templeton will be able to force Vodafone Idea to repay the loan if the company is unable to pay the interest rate as per the reset clause. .
Messages from a Franklin Templeton spokesperson seeking clarity on the issue had been responded to by the time of publication.
Vodafone Idea exposure is present in six loan schemes of Franklin Templeton which were closed in April 2020. However, it was placed in a separate portfolio by Franklin Templeton Mutual Fund in January of the same year. To wrap up In side pocketed units, investors cannot enter and exit at their own will. As and when this debt is recovered from the issuers, the money is repaid to them.
This week, Franklin Templeton began paying a fresh tranche of Rs 2,918.5 crore to unit holders in six schemes that were closed on 23 April 2020. With this, the plans will come back cumulatively. ₹23,998.84 crore to investors or 96.18 per cent of the net asset value of the six schemes. The winding up is being done by SBI Funds Management Pvt Ltd under the order of the Supreme Court.
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