Zee moves NCLAT against initiation of insolvency proceedings
Zee Entertainment Enterprises Ltd (ZEEL), which is now facing corporate insolvency resolution process (CIRP), will move to the National Company Law Appellate Tribunal (NCLAT) against the NCLT order approving the initiation of insolvency proceedings.
In a statement issued by office of Punit Goenka, MD and CEO of Zee Entertainment, the company said that Punit Goenka filed an appeal in the NCLAT on Thursday, seeking relief against the order passed by the Mumbai bench of the NCLT.
“Mr. Goenka is taking all the necessary steps as per law, to protect the interests of all stakeholders of Zee Entertainment Enterprises Ltd. (ZEE) and to achieve a timely completion of the proposed merger with Culver Max Entertainment Pvt. Ltd. Mr. Goenka firmly believes in the potential of the merger, to deliver immense value to all stakeholders. ZEE is a debt-free & financially strong company, and believes in value creation for its stakeholders,” read the statement.
The troubled media and entertainment company risks undergoing insolvency proceedings after the Mumbai bench of the National Company Law Tribunal on 22 February admitted the insolvency petition filed by IndusInd Bank.
The bank filed the plea against Zee Entertainment Enterprises for defaulting on a payment of Rs 83.08 crore. The tribunal has appointed Sanjay Kumar Jhalani as the interim resolution professional.
“In the petition filed by Indusind Bank against the Company under Section 7 of the Insolvency & Bankruptcy Code, 2016, the Hon’ble National Comp Tribunal, Mumbai Bench (NCLT) has pronounced its Order dated February 22, 2023 admitting the Company to corporate insolvency resolution process under the provisions of the Code,” said Zee Entertainment Enterprises in a filing to the Bombay Stock Exchange on 22 February.
According to the filing, ZEEL is a party to the Debt Service Reserve Account (DSRA) Guarantee Agreement entered into with IndusInd Bank for the term-loan facility advanced to another Essel Group firm, Siti Networks Ltd.
Earlier, IDBI Bank and Indian Performing Right Society Limited had also filed insolvency petition against Zee Entertainment.
ZEEL recently merged with Sony Pictures Network India after the final go-ahead from the Competition Commission of India (CCI), which has raised several market dominance related concerns over the merger. The company had to agree to sell three of its Hindi entertainment channels — Big Magic, Zee Action and Zee Classic – to address the concerns raised by CII.
But even before the merger met regulatory hurdles, ZEEL’s minority shareholders – Invesco Group – had vehemently opposed the merger. The foreign institutional investor had even tried to force the MD and CEO Punit Goenka to step down from the post. However, Zee Entertainment managed to sailed through those opposition to not only complete the merger but also retain its MD and CEO.
Another Zee group company – Zee Learn – is also facing insolvency proceedings after NCLT admitted the insolvency application filed by Yes Bank after the former defaulted on a payment of Rs 469 crore.
