The National Company Law Appellate Tribunal (NCLAT) on August 17 agreed to hear a plea by IDBI Bank seeking insolvency proceedings against Zee Entertainment Enterprises Limited (ZEEL) to recover dues of Rs 149.60 crore. No notice has been issued to ZEEL and IDBI Bank has now sought a week’s time to file additional documents. The next date of hearing is on August 31.
IDBI Bank, in its petition, claims that Zee had agreed to secure loans extended to Siti Networks through a Debt Service Reserve Account (DSRA) Guarantee. The lender says Siti Networks had to maintain the DSRA, which would be required to always have two quarters of interest of term loan, working capital, and one quarter of principal payment.
It alleges that Zee had submitted a guarantee and was responsible for any shortfalls in the DSRA. It adds that the media firm was informed about the shortfalls.
Zee has opposed the lender’s plea and sought its dismissal. It also opposed the issuance of a notice.
Meanwhile, on August 11, NCLT
approved the merger of Zee Entertainment and Sony India Merger. The approval came nearly two years after the merger was announced in December 2021.
As per the scheme of the arrangement, Sony will indirectly hold 50.86 per cent of the combined company. The founder of Zee will own around four percent and the rest will be with the other shareholders of ZEEL. Moreover, Sony Group will also pay a non-compete fee of Rs 1,100 crore to the Essel Group promoters.
