Non-bank financial company was downgraded to below-investment grade last year
UTI Mutual Fund (MF) and Nippon India MF received part payment from Altico Capital on October 8.
“The implementation of resolution plan of Altico Capital is in process. Meanwhile, the surplus amount lying in company’s balance sheet has been distributed to all debt investors proportionately,” Nippon India MF said in a note to investors.
The fund house had side-pocketed debt exposure to the troubled non-bank financial company in its ultra-short duration fund on September 25, 2019, following its downgrade to below-investment grade.
UTI MF received Rs 12.3 crore as partial payment for its side-pocketed exposure in its credit risk fund, as well as for its exposure in some of its close-end fixed term plans.
In-line with regulatory guidelines, UTI MF had marked down debt exposures to Altico Capital by 75 percent in September last year.
In case of UTI - Fixed Term Income Fund - Series XXVII - Plan II (1161 Days) and UTI Credit Risk Fund, the recovery proceeds will be distributed to investors in proportion to investors’ unit holdings, as exposures in these schemes were held in side-pockets (segregated portfolios created to hold stressed exposures).In the case of other fixed term plans of UTI MF, the payments will get credited to the schemes and this will reflect in their net asset values.