After the downgrade of debt instruments of Zee Learn Limited to ‘B’ i.e. ‘below investment grade’ by CARE Ratings, UTI Mutual Fund has created segregated portfolio in respect of Zee Learn Limited in UTI Credit Risk Fund and UTI Medium Term Fund effective July 7, 2020 subject to approval from Board of Trustees, said the company press release.
As of July 06, 2020, UTI Credit Risk Fund and UTI Medium Term Fund have the following exposures in the debt securities of Zee Learn Limited which are proposed to be segregated:
|
Scheme Name |
Name of Security |
ISIN |
Market value (in Rs. Crores.) |
% of Net Assets |
|
UTI - Credit Risk Fund. |
0%(F-1)RNCD ZEELEARN LTD-08/07/2020 |
INE565L07018 |
40.77 |
9.24 |
|
UTI - Medium Term Fund |
0%(F-1)RNCD ZEELEARN LTD-08/07/2020 |
INE565L07018 |
3.40 |
3.02 |
The above securities were rated AA (SO) by CARE Ratings Limited on March 12, 2015, on the basis of an unconditional and irrevocable undertaking from Zee Entertainment Enterprises Ltd (rated CARE AA/ A1+ on September 11, 2014) for funding of a Debt Service Reserve Account (“DSRA”) to cover any shortfall in servicing outstanding obligations of the said securities 7 days prior to the due date as per the repayment schedule.
Here is the impact on investors
• Upon recovery of money from Zee Learn Limited in the segregated portfolio, whether partial or in full, the money so recovered will be distributed to investors in proportion to their holdings in the segregated portfolio
• Existing investors in the above mentioned schemes, as of the day of creation of the segregated portfolio will be allotted an equal number of units in the segregated portfolio as those held in the main portfolio. No subscription or redemption will be allowed in the segregated portfolio of the captioned schemes
• Investors redeeming their units will get redemption proceeds based on the net asset value (“NAV”) of the main portfolio and will continue to hold units of the segregated portfolio
• Processing of subscriptions and redemptions in the scheme will be suspended from the credit event day until the approval from the board of trustees is received for the segregation of the portfolio
• Investors subscribing to the schemes will be allotted units only in the main portfolio based on its NAV
• UTI AMC will enable listing of units of the segregated portfolio on a recognized stock exchange within 10 working days of creation of the segregated portfolio and enable transfer of such units on receipt of transfer requests
• UTI AMC will disclose separate NAVs of the segregated and main portfolios from the date of creation of the segregated portfolio
• A statement of account indicating the units held by the investors in the segregated portfolio along with the NAV of both the segregated portfolio and the main portfolio as of the day of the credit event will be communicated to the investors within 5 working days of creation of the segregated portfolio
