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July 9, 2001
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Money > Business Headlines > Report July 9, 2001 |
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US-64 repurchase price may be fixed at unit face valueBS Markets & Banking Bureau The Unit Trust of India is likely to peg the repurchase price of the units of its beleaguered US-64 scheme at its face value (Rs 10 per unit) for small investors wanting to exit the scheme. The UTI board will meet in Bombay on Monday to finalise the exit option. Top officials of the Trust were closeted in a meeting till late tonight to prepare the agenda for the board meeting. Sources said one of the views that found favour was that the repurchase price could be fixed at the face value for a limited period of time. "Based on the assumption that the NAV will not be too far from the face value of Rs 10, this sounds the most logical option," sources said. "We are still in the process of deliberations," a top UTI official said, adding that several options are being considered. In the absence of the correct NAV, we have to make do with alternatives and it is for the board to finalise the best option that is fair to the investors wanting to exit. The board will also deliberate on the definition of the "small investor " who will be eligible for the relief package. But UTI executive director BG Daga had said at a press conference in Bombay on Friday that investors holding upto 1,000 units of US-64 form almost 55 per cent of the total investor base. Daga had also said that the board will consider "all options, within the ambit of the ban or outside it," hinting that the board will have to review its earlier decision on whether to continue with the ban. On July 2, the Trust had taken the unprecedented decision to suspend the sale and repurchase of Units under US-64 till the end of the year. With the reserves of US-64 turning negative, the Trust is looking at ways to overcome the liquidity crunch to pay-off the small investors. These include the Reserve Bank of India extending a special repo line to UTI in lieu of its portfolio of government securities; banks buying out the Trust's portfolio of triple A and double A rated bonds and UTI selling its real estate assets. Powered by YOU MAY ALSO WANT TO READ:
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