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UTI creates liquidity option for US-64 investors

All US-64 investors holding units on June 30, 2001 may offer for repurchase up to 3,000 units per unit-holder from August 1, 2001 to May 31, 2003 at the price beginning with Rs 10 or the net asset value whichever is higher.

The repurchase price of Rs 10 (face value) will be for the month of August and for the subsequent months it will increase by 10 paise till May 2003. But if NAV is higher, the US-64 units will be repurchased at this value (NAV), the board of trustees of UTI approved this measure at a meeting after M Damodaran was appointed as its new chairman, UTI officials said.

US-64 will fully reopen for fresh sales and repurchases at NAV based prices with effect from January 1, 2002.

Thereafter, for 3,000 units per unit-holder covered under measures mentioned above, the repurchase price would be the higher of the applicable repurchase price under the said measures or the then prevailing NAV based repurchase price. These 3,000 units per unit-holder will also be entitled to dividend, as may be declared.

The deficit, if any, between the NAV and the applicable repurchase price will be met and so funded that this will prevent any NAV dilution on account of the measures mentioned earlier.

Adequate liquidity arrangements have been made to ensure that any funds needed for redemption will be available without UTI having to resort to large-scale sale of its investments in the market.

The Government of India has agreed to stand fully behind UTI to support implementation of the above scheme for small investors.

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