Home / Business / Zee to pay IndusInd dues

Zee to pay IndusInd dues

Zee share soared 9.26 per cent, or Rs 17.50, to end at Rs 206.55 on the BSE
Representational image
Representational image
File picture

Our Special Correspondent   |   Mumbai   |   Published 17.03.23, 02:44 AM

Shares of Zee Entertainment Enterprises Ltd surged more than 9 per cent on Thursday on reports it has agreed to pay Rs 83 crore dues to IndusInd Bank, which will pave the way for the much-anticipated merger with Sony.

The Zee share soared 9.26 per cent, or Rs 17.50, to end at Rs 206.55 on the BSE.


Bloomberg has reported Zee will settle the dues worth Rs 83.7 crore as early as Friday following which the private sector lender could withdraw the insolvency proceedings initiated against the media firm.

IndusInd Bank had claimed Zee did not fulfil its obligation under a debt service reserve account agreement (DSRA) between the lender and Siti Networks to which Zee was a party.

The bank said Zee had guaranteed the Rs 150-crore loan to Siti, which was expected to always maintain an amount equal to one quarter’s interest and one quarter’s principal in the account for the purpose of servicing its debt.

IndusInd pointed out Zee failed to ensure Siti maintain the sum inspite of being the guarantor.

Last month, the Mumbai bench of the NCLT had admitted an insolvency plea by IndusInd Bank which led to a question mark over the proposed merger with Culver Max Entertainment, formerly known as Sony Pictures Networks India, which would have created India’s biggest media empire.

The company had already received approvals from shareholders, creditors, bourses and the Competition Commission of India (CCI). A final green signal from the NCLT is awaited.

However, on February 24, Zee got a major relief when the National Company Law Appellate Tribunal (NCLAT) stayed the insolvency proceedings initiated by IndusInd Bank.

Zee managing director and chief executive Punit Goenka had filed an appeal with the appellate tribunal challenging the NCLT order. The NCLAT had set the matter for final disposal on March 29.

"It is positive news as this will make the road for merger with Sony easier for Zee, since it was a hurdle (the IndusInd dispute) for Zee. NCLT approval shall be the final step towards completion of the merger. Positive for the stock,’’ Ashwin Patil, senior research analyst at LKP Securities, said.

In a separate announcement, Zee on Thursday said it has “mutually” settled disputes with the Indian Performing Rights Society (IPRS) and the insolvency petition filed by the latter has been withdrawn before the NCLAT.

“The company and the IPRS have mutually entered into the settlement agreement today (Thursday) on such agreed terms by which all disputes and claims have been settled between the company and IPRS and accordingly IPRS has agreed to withdraw the aforesaid insolvency petition filed by them,” Zee said in a regulatory filing.

Zee did not share the terms and conditions of settlement. “There is no penalty paid and no material impact on the financial position of the company,” it said.

In January this year, the IPRS moved the NCLT against Zee claiming a default of Rs 211.41 crore.

The IPRS filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC) 2016 as an operational creditor claiming dues towards royalty payable for utilisation of “literary and musical works”.

Copyright © 2020 The Telegraph. All rights reserved.