NCLT admits insolvency petition against Zee Entertainment

The Mumbai bench of the National Company Law Tribunal on Wednesday allowed to initiate insolvency proceedings against Zee Entertainment Enterprises Ltd.

The court appointed Sanjay Kumar Jhalani as the interim resolution professional.

The order comes on a petition filed by IndusInd Bank Ltd. after the company failed to fulfill its obligation under a Debt Service Reserve Account Agreement between the bank and Siti Networks Ltd., to which Zee was also a party. Siti Networks is part of the Essel Group.

Under the terms of the agreement, Zee had guaranteed IndusInd Bank’s Rs 150 crore loan to Siti Networks, which was expected to maintain an amount equal to one quarter’s interest and one quarter’s principal at all times in the account for the purpose of servicing its debts. Zee, under the agreement, had guaranteed to maintain such an amount, which it failed to do.

The order comes on a petition filed by IndusInd Bank Ltd. after the company failed to fulfill its obligation under a Debt Service Reserve Account Agreement between the bank and Siti Networks Ltd., to which Zee was also a party. Siti Networks is part of the Essel Group.

Under the terms of the agreement, Zee had guaranteed IndusInd Bank’s Rs 150 crore loan to Siti Networks, which was expected to maintain an amount equal to one quarter’s interest and one quarter’s principal at all times in the account for the purpose of servicing its debts. Zee, under the agreement, had guaranteed to maintain such an amount, which it failed to do. Bloomberg