The Mumbai bench of the National Company Law Tribunal (NCLT) on Tuesday adjourned the matter related to applications filed by certain lenders and creditors, against the proposed merger of media and entertainment company Zee Entertainment Enterprises Ltd (ZEE) with Culver Max Entertainment (earlier Sony Pictures Networks India), to 9 March.
The matter includes petitions filed by the IndusInd Bank, Axis Finance Limited, IDBI Bank, and the Indian Performing Right Society (IPRS).
Counsels for ZEE maintained that the applications filed to oppose the merger were tactics being used to delay the merger completion process.
They pointed out that the key regulatory and shareholder approvals have already been received; which is why these applications cannot prevent a merger from taking place. They said that the scheme has already received approval from 99.97% of shareholders and all secured creditors, besides SEBI, Stock Exchanges, the CCI, Regional Director, and the official liquidator.
Last year, IndusInd Bank had first approached the dedicated bankruptcy court against ZEE for alleged default of Rs. 89 crore. Later, Axis Finance, a subsidiary of private sector lender Axis Bank, had first moved the Bombay High Court against Essel Group promoter Subhash Chandra and his sons Punit and Amit Goenka, seeking recovery of Rs. 61.64 crore, and later filed an application in the NCLT.
In December, another financial creditor, IDBI Bank had filed an insolvency application claiming a default of Rs. 149 crore. The bank’s purported claim arises under a debt service reserve agreement entered into by the bank and the company for the financial facility availed by Siti Networks, an Essel group entity.
In January, IPRS had also filed a petition at the tribunal under the Corporate Insolvency Resolution Process (CIRP), seeking payment of over ₹211.41 crore.
Earlier in December 2021, Zee and Sony had signed a definitive agreement to merge operations. As part of the proposed merger, the Japanese multinational will own 50.86% stake in the merged entity, while the promoters of ZEE will own 3.99% stake. Existing public shareholders in ZEE will have the remaining 45.15% in the merged company.