Franklin Templeton to finish buyout in June

By Praveen Chandran | 27 May 2002

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Mumbai: The worlds leading mutual fund company Franklin Templeton Investments expects to conclude the deal of buying out Pioneer ITIs stake from its current promoters by the end of June 2002.

In another move Templeton is also planning to outsource its global IT and business processes from India. Templeton managing director Vijay Advani says in this endeavour it is also exploring the options to enter into a strategic tie-up with an IT solutions company.

Regarding the Pioneer ITIs stake, Franklin Templeton International president Charles Johnson says negotiations are still on between the two parties, and put the deal roughly at $50 million.

Templeton had signed a memorandum of understanding with Pioneer ITI on 18 March 2002 to acquire the latters asset portfolio in India through a 100-per cent acquisition of the asset management company from its promoters Pioneer Investment Corporation and Investment Trust of India. Johnson says his company is keen to increase its presence in India. We will continue growing the domestic fund business.

Johnson says the investment potential is massive in India and along with Pioneers complementary products they are set to capture a huge market. About the divergent investment pattern of the two funds, and whether this would lead to a conflict of interests, he says Franklin Templetons approach has been one of consistent, superior and sustainable investment pattern.

Talking about the specific schemes, in light of the merger with Pioneer ITI, Advani says the details on each plan are yet to be finalised. And once the merger is completed, which is expected in June 2002, we will reveal all the details of the particular schemes post-discussion with the Securities and Exchange Board of India.

About the current situation on the Indo-Pak border, Johnson says this would not affect its merger with Pioneer. In spite of the volatile situation the opportunity for investing in India still looks very attractive. As on 17 May 2002 Templeton mutual funds assets were of the order of Rs 4,117 crore.

About the markets scenario, Johnson says the mutual fund sector in India offers a lot of opportunity for growth. Opening up of the pension sector will be an added incentive to increase our presence in the country.

 

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