Zee shares tumble to 52-week low as it’s admitted to insolvency process

Shares of Zee Entertainment Enterprises Ltd. fell to their lowest level in 52 weeks after the insolvency court admitted it to insolvency proceedings.

The National Company Law Tribunal’s Mumbai bench granted permission to initiate insolvency proceedings against Zee Entertainment Enterprises Ltd. on Wednesday. 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.

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.

The merger between media behemoths Zee Entertainment Enterprises Ltd. and Sony Pictures Networks India Pvt. has come to a standstill after the insolvency court admitted Zee Entertainment Enterprises Ltd. to insolvency on Wednesday.

Once a company is admitted to insolvency, a moratorium kicks in barring any transfer of assets, according to the IBC.

Shares of the company declined 8.50% to Rs 188.8 apiece as of 10:15 a.m., compared with 0.18% gains in the Nifty 50. The total traded volume so far in the day stood at 22.9 times its 30-day average. The relative strength index was at 18, implying that the stock maybe oversold.

Out of the 24 analysts tracking the company, 21 maintain a ‘buy’ rating, two recommend a ‘hold’ and one suggests to ‘sell’ the stock, according to Bloomberg data. The 12-month consensus price target implies an upside of 52.4%. BQ Prime