The maturity value of the NCDs, including redemption premium, was Rs 616 crore but it is only valued at a market value of Rs 92 crore.

New Delhi, May 24:

In a release on Friday, Franklin Templeton Mutual Fund said that it is evaluating recovery proceedings against Essel Infraprojects Limited (EIL) defaulted on a Rs 92 crore maturity obligation of non convertible debentures (NCD). The NCDs are backed by a pledge of listed shares of Zee Entertainment, Dish TV, unlisted shares of EIL, personal guarantee of Essel Group Chairman Subhash Chandra and corporate guarantee. The maturity value of the NCDs, including redemption premium, was Rs 616 crore but it is only valued at a market value of Rs 92 crore. On maturity date of May 22, the issuer was unable to meet the obligation.

“These NCDs are currently fairly valued at Rs 92 crore in our portfolio at 15 per cent of maturity value after providing a 85 per cent haircut,” Franklin Templeton said.

As far as proceedings are concerned, the mutual fund house has appointed a legal counsel and is looking to get maximum recovery.

“We have appointed a legal counsel and are actively considering all necessary actions to maximise recovery value. The schemes will continuously monitor the developments in EIL and take appropriate steps in the best interest of its unitholders,” the release said.

There are four schemes with exposure to this EIL debt namely, Dynamic Accrual, Credit Risk, Short Term Income Plan and Low Duration.

Franklin Templeton also said the event does not have any impact on the net asset values (NAVs) of the schemes as of May 22, compared to their NAVs as of May 21.

“This only reflects the realisable value basis the current share cover and does not indicate any reduction or write-off of the amount repayable by Essel Infraprojects. The valuation would be monitored daily and the receivable will be adjusted to reflect any material change in the share cover (listed equity shares),” the fund house’s release stated.