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July 3, 2001
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Money > Business Headlines > Report July 3, 2001 |
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Reserve fund to be tapped to bring US-64 back to lifeP Vaidyanathan Iyer & Sidhartha The Unit Trust of India is planning an ingenious way to infuse funds into its beleaguered scheme US-64. The restructuring plan, which envisages bringing the scheme into the NAV mode by the end of this fiscal, involves tapping the Rs 15 billion development reserve fund of UTI. According to a top UTI executive, the institution plans to transfer the real estate investments and debt portfolio of US-64 to the DRF at market value and draw an equal amount from the fund. "The real estate and debt portfolio of US-64 is currently valued at Rs 12 billion," sources in UTI said. These would be transferred to the DRF in exchange for the liquid cash, they added. Describing it as the first move towards bringing the country's oldest scheme with a unit capital of Rs 127.78 billion into the net asset value pricing structure, top UTI executives said US-64's NAV would initially be published weekly and then it would gradually move into the daily mode. They said that 10 per cent of the corpus raised by any new scheme launched by UTI was transferred to the DRF. "Apart from this, a certain percentage of the net income of all the schemes also accrues to the fund," he said and added that about Rs 1 billion was added to the fund every year. UTI chairman P S Subramanyam on Monday conceded that the reserves of US-64 had almost turned negative and that the current NAV of the scheme might be below par value. Announcing the results of UTI for the last financial year, he said as part of the restructuring plan, US 64 would be assigned a new chief investment officer whose only mandate would be to manage the US-64 fund. Talking to Business Standard, Subramanyam further said that UTI would keenly pursue selling block shares of various companies in the coming months. "Much of the UTI's block holding falls within the US-64 corpus," he said. The institution has significant holding in about 100-150 companies. While Subramanyam did not reveal the market value of the investments in these companies, he said that the institution was looking at negotiated deals to sell off its stake at decent value. Powered by YOU MAY ALSO WANT TO READ:
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