Zee Entertainment Enterprises Ltd on Friday said it has entered into a one-time settlement with Standard Chartered Bank for a loan taken by Siti Networks, which belongs to the Essel group.
This is yet another step by the media major to remove potential hurdles that could come in the way of its much-awaited merger with Sony.
Zee said in a regulatory filing that the foreign lender had sanctioned certain credit facilities to Siti Networks Ltd which was secured by Debt Service Reserve Account (DSRA) support and an undertaking from Zee.
“Since, the borrower has defaulted in its debt repayment obligations to the bank, the company has entered into one-time settlement agreement with the bank in respect of DSRA claims/undertaking in the interest of amicably resolving the issues between the parties. There is no impact on the financial position of the company,’’ Zee said.
It, however, did not disclose specifics that included the amount of loan taken by Siti or the nature of the one-time settlement.
In a similar deal, Zee said it has agreed with IndusInd Bank Ltd to settle all disputes and claims between them.
The private sector bank had filed a plea before the Mumbai bench of the National Company Law Tribunal (NCLT) to initiate insolvency proceedings against Zee claiming that the media firm defaulted Rs 83.08 crore. The Mumbai bench of the NCLT had admitted the plea and appointed an interim resolution professional.
IndusInd claimed Zee had not fulfilled its obligation under a DSRA between the lender and Siti Networks to which Zee was a party. ZEEL was the guarantor for the loan taken from the bank.
Zee MD and CEO Puneet Goenka moved the National Company Law Appellate Tribunal (NCLAT) challenging NCLT. The appellate body stayed the proceedings. However, Zee which did not want any obstacles to the merger with Sony, agreed to pay the dues.
Zee is merging with rival Culver Max Entertainment Pvt Ltd, formerly known as Sony Pictures Networks India, to create India’s biggest media empire.
Shares of Zee on Friday ended nearly 1.99 per cent lower at Rs 211.70 on the Bombay Stock Exchange.