Here is exactly where Kotak's expertise (as an advisor) will be tested in Franklin's case. Franklin is stuck between revoking shares (e-voting could be an issue) or negotiating for larger recovery from Mr Subhash Chandra. (1/5)
HDFC has already taken a hit on its balance sheet and paid back investors in the Essel FMP case. (2/5)
Now the value of Essel's debt in Franklin's fund is 92 cr., if they sell the shares they might get slighly more than 92 cr. but the total due is 600+ cr. Should they sell shares or negotiate for larger recovery? Either ways the NAV will be better off. (3/5)
Franklin had an opportunity in September 19 to sell Zee shares when others did but they dint in the hope of full recovery (Had they sold shares, whatever they would have got would be the final settlement) (4/5)
Nippon turned out to be the smartest to sell the shares at 400, most others were caught napping (ofcourse in the hindsight) (5/5)
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