Days after its $10 billion merger transaction with Sony India collapsed, Zee Entertainment Enterprises moved the National Company Law Tribunal (NCLT), appealing to the court to direct Sony India to implement the merger scheme cleared by the NCLT in August last year.
At the same time, Zee has also initiated legal action to contest Culver Max Entertainment and Bangla Entertainment (owned by Sony) claims in the arbitration proceedings before the Singapore International Arbitration Centre (SIAC), the firm informed stock exchanges on Wednesday.
“The company has denied that Culver Max and Bangla Entertainment are entitled to terminate the merger agreement, and the claim for termination fee is legally untenable and has no basis whatsoever,” the statement by Zee said.
Zee said Culver Max and Bangla Entertainment are in default of their obligations to give effect to and implement the merger scheme, sanctioned by the NCLT.
“The company has called upon Culver Max and Bangla Entertainment to immediately withdraw the termination and confirm that they will perform their obligations to give effect to and implement the merger scheme, sanctioned by the NCLT. The company has reserved all its rights in this regard,” Zee said as it reacted to the $90 million termination fees sought by Sony India.
Zee shares recovered marginally on Wednesday, with its share price closing 6.7 per cent up at Rs 166 per share on Wednesday.
Meanwhile, Sony India is going full steam ahead with its plans without Zee and said it is looking for both organic and inorganic growth opportunities in India.
N P Singh, managing director and chief executive officer of Sony Pictures Networks India, informed its 1,200 employees that the company will go ahead with its plans in new programming and scouting for new opportunities.
“As we transition from this phase, I am, along with the senior management team, committed to setting the company up for a long-term, strong future. We will actively explore new organic and inorganic possibilities to strengthen our market presence,” Singh said.
The Indian entertainment industry is witnessing a transformation, with Reliance Industries in talks to acquire Disney India’s operations. With its merger with Sony India collapsing, Zee will have to look for new strategic partners, bankers and lawyers said.
Singh said Sony India’s immediate focus will be to unleash its full potential, continue to generate content to engage audiences and boost subscriber growth and revenues.
“We’ve always been at our best when innovating and pushing the boundaries of what we can achieve. The media and entertainment world is constantly changing, and our journey is not just about adapting to change; it’s about leading it,” he said.
“As we transition from this phase, I am, along with the senior management team, committed to setting the company up for a long-term, strong future. We will actively explore new organic and inorganic possibilities to strengthen our market presence,” Singh said. He said Sony India’s immediate focus will be to unleash its full potential.