NCLT dismisses IDBI Bank’s insolvency plea against Zee Entertainment

The Mumbai bench of the National Company Law Tribunal (NCLT) on Friday dismissed IDBI Bank’s insolvency plea against Subhash Chandra-promoted Zee Entertainment Enterprises Ltd (ZEEL). IDBI Bank in December 2022 had filed an insolvency resolution petition in NCLT against Zee for the default of over Rs 149 crore.

The entertainment company, in a filing in December 2022, said IDBI Bank, which claimed to be a financial creditor, filed the petition before the Mumbai bench of the NCLT. The tribunal’s verdict is crucial for the media company in its proposed merger with Sony Pictures Networks India.

The much-awaited merger between Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises Limited (ZEEL) is expected to be completed by the first half of the current fiscal year ending March 31, 2024, Sony Corp CEO Kenichiro Yoshida said on Thursday. The merger of Zee Entertainment Enterprises with SPNI was announced in 2021.

“By the end of the first half of this fiscal year, we are trying to complete the merger with ZEEL,” Yoshida said at the company’s annual corporate strategy meeting.

In April, Bloomberg reported that Zee Entertainment is trying to hold settlement talks with its creditors to repay debts in a bid to remove all hurdles before completing the merger with the Sony Group that would create a $10 billion media giant.

In March this year, the company repaid dues of IndusInd Bank Ltd., which was one of its creditors. Following this, the lender said it will withdraw its objections against the merger, Zee said in a filing.

The multilingual TV network had reportedly offered IDBI Bank to repay a loan of about Rs 149 crore but in tranches.
In March this year, the company repaid dues of IndusInd Bank Ltd., which was one of its creditors. Following which, the lender said it will withdraw its objections against the merger, Zee said in a filing.

Zee’s founders have been in separate discussions with Axis Bank Ltd and JC Flowers & Co.’s asset reconstruction unit to settle dues of Rs 400 million, as per reports.

Atlanta-based Invesco Developing Markets Fund, which owned the largest chunk of 18 per cent shares in Zee at the time of the merger announcement, exited its entire holdings in the company, Zee said in one of its filings.

Sony-Zee merger
The merger of the Puneet Goenka-led company with Sony’s India arm, Sony Pictures Networks India, was announced in 2021. After many hurdles and clashes with shareholders, the merger got the go-ahead from the Competition Commission of India (CCI) in 2022. It has also received a nod from the stock exchanges.

Under the terms of the arrangement, Sony will hold a 50.86 per cent stake in the merged entity. The promoters of Zee will hold 3.99 per cent and other Zee shareholders will hold a 45.15 per cent stake in the combined company. Business Today