ZEE Entertainment Enterprises Limited (ZEEL) has withdrawn its application from the National Company Law Tribunal (NCLT) that sought directions to Sony Group Corp-owned Culver Max Entertainment and Bangla Entertainment to implement the composite scheme of arrangement between the three companies.
In an official statement issued late on Monday evening, the company said it has withdrawn the implementation application based on the advice received by the board after a detailed consultation with legal experts. Sony and Zee had signed definitive agreements on December 21, 2021 to merge their businesses.
ZEEL had filed the application on January 24 after Culver Max and Bangla Entertainment—both India units of Sony Group–terminated the merger agreement on January 22 over an alleged breach of the merger cooperation agreement (MCA), putting an end to the multi-billion-dollar merger deal that had been in the making for more than two years.
Culver Max and Bangla Entertainment had also filed applications in the NCLT challenging the validity of ZEEL and its shareholder Mad Men Film’s merger implementation applications.
Lawyers tracking the development said Mad Men Film’s application will become infructuous due to ZEEL’s withdrawal of the application from the NCLT. ZEEL also said that the withdrawal of the merger implementation application will allow it to pursue its claims against Culver Max and Bangla Entertainment before the Singapore International Arbitration Centre (SIAC) and other forums.
While terminating the merger agreement, Sony’s India entities had initiated arbitration proceedings against ZEEL before SIAC and had sought $90 million in termination fees from the Indian entertainment major for alleged breach of the merger cooperation agreement (MCA).
The firm said that the decision will allow it to pursue growth and evaluate strategic opportunities to generate higher value for shareholders.
