Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.

Analysis

11,661.8575.5
Stock Analysis, IPO, Mutual Funds, Bonds & More

Aditya Birla debt mutual funds to gain as IL&FS arm to pay back creditors

JRPICL is set to begin servicing its debt obligations after lenders and IL&FS reached agreements to restructure debt.

, ET Bureau|
Jul 15, 2019, 09.48 AM IST
0Comments
Getty Images
image
Some debt schemes of Aditya Birla Sun Life Mutual Fund, which held investments in Jharkhand Road Projects Implementation Company Limited (JRPICL), stand to gain as cash flows from JRPICL will begin as the company begins servicing both principal and interest.

JRPICL, one of the three group entities of debt-laden Infrastructure Leasing & Financial Services (IL&FS), is set to begin servicing its debt obligations after lenders and IL&FS reached agreements to restructure debt, according to submissions before an appellate tribunal.

Aditya Birla Sun Life Mutual Fund has an exposure of ₹950 crore to this company. A binding term sheet signed between IL&FS and creditors of JRPICL moves it from amber to green.

“It is a big move for us as assets in which everyone was concerned is now becoming a good asset. Secondly, servicing of both principal and interest will begin,” said A Balasubramaniam, CEO, Aditya Birla Sun Life Mutual Fund.

He said this is a big order to ensure ring-fenced assets are made to work the way they are meant.

“It is a positive development,” said Vikram Dalal, managing director, Synergee Capital. “Since October 2018, all the financial and operational creditors are waiting for some concrete resolution plan. And now they see some ray of hope from NCLAT (National Company Law Appellate Tribunal) and from the new management. Potential buyers are showing interest in acquiring productive assets of IL&FS subsidiaries. The mutual funds will get their outstanding dues if they have invested in those specific subsidiaries or SPVs (special purpose vehicles).”

Earlier, IL&FS cited a court order by the NCLAT while claiming that its SPVs were entitled to a moratorium on repayments. Aditya Birla Sun Life Mutual Fund had marked down its investments by 25% in various debt oriented schemes and fixed maturity plans where it held this investment.

Also Read

Reliance Mutual Fund renamed as Nippon India Mutual Fund

Can these mutual funds deliver?

Are mutual funds safe?

Mutual funds for lumpsum investment

Small cap mutual funds

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service