Zee-Sony merger: IDBI moves Delhi Bench of NCLAT challenging NCLT order
On August 10, the Mumbai Bench of NCLT had given its nod to Zee's $10 billion merger with Culver Max. It had dismissed the objections raised by lenders including IDBI Trusteeship, IDBI Bank, Axis Finance, JC Flowers Asset Reconstruction Co and Imax Corp.
- Sep 5, 2023,
- Updated Sep 5, 2023 5:58 PM IST
Zee-Sony merger: IDBI Bank has challenged the National Company Law Tribunal (NCLT) order that approved the mega merger between Zee Entertainment Enterprises Ltd and Culver Max Entertainment (Sony Pictures).
On August 10, the Mumbai Bench of NCLT had given its nod to Zee's $10 billion merger with Culver Max. It had dismissed the objections raised by lenders including IDBI Trusteeship, IDBI Bank, Axis Finance, JC Flowers Asset Reconstruction Co and Imax Corp. The bench in its oral order allowed the application for the merger.
In a regulatory filing on September 5, Zee said that the appeal against the NCLT order has been filed before the Delhi-bench of the National Company Law Appellate Tribunal (NCLAT).
"The Company has been served with an appeal on behalf of IDBI Bank Limited against the Company before the NCLAT, Delhi, challenging the order dated August 10, 2023, passed by NCLT, Mumbai Bench, approving the composite scheme of arrangement amongst Zee Entertainment Enterprises Limited, Bangla Entertainment Private Limited and Culver Max Entertainment Private Limited (formerly known as Sony Pictures Networks India Private Limited)," it said.
In December 2021, Sony and ZEEL signed definitive agreements to merge. As per the deal, after the merger Sony will indirectly hold a majority of 50.86 per cent of the new entity, while the founders of ZEEL will hold 3.99 per cent. Other ZEEL shareholders will hold a 45.15 per cent stake.
As per estimates, after ZEEL merges with SPNI, the new entity will have a cash balance of $1.5 billion at closing, including through an infusion by the current shareholders of SPNI and the promoters (founders) of ZEEL.
The deal, which has already received approvals from the stock exchanges, the Securities and Exchange Board of India, and the Competition Commission of India, would create the country’s largest media and entertainment company. It would be the country’s largest TV network company with a 26 per cent market share.
The merged entity would have over 70 TV channels, two video streaming services (Zee5 and SonyLiv) and two film studios (Zee Studios and Sony Pictures Films India).
In an interim order on June 12, Sebi had prohibited Subhash Chandra, chairman of Essel Group, and his son Punit Goenka from assuming directorial or major managerial positions due to alleged misuse of funds from Zee for personal gain.
The Securities Appellate Tribunal upheld Sebi’s interim order, imposing a one-year restraint on Zee promoters Chandra and Goenka from holding board positions in publicly listed companies, citing alleged fund diversion.
On August 30, SAT refused to offer interim relief to former Zee chief Punit Goenka, who was barred by Sebi from holding key positions within four Zee group firms and in the merged entity of ZEEL and Sony Pictures Networks India.
Shares of Zee Entertainment Enterprises ended at Rs 274.50, up by 3.33 per cent.
Also read: ZEE, Equitas SFB, Coforge, City Union Bank: How MF favourite stocks fared in 2023
Zee-Sony merger: IDBI Bank has challenged the National Company Law Tribunal (NCLT) order that approved the mega merger between Zee Entertainment Enterprises Ltd and Culver Max Entertainment (Sony Pictures).
On August 10, the Mumbai Bench of NCLT had given its nod to Zee's $10 billion merger with Culver Max. It had dismissed the objections raised by lenders including IDBI Trusteeship, IDBI Bank, Axis Finance, JC Flowers Asset Reconstruction Co and Imax Corp. The bench in its oral order allowed the application for the merger.
In a regulatory filing on September 5, Zee said that the appeal against the NCLT order has been filed before the Delhi-bench of the National Company Law Appellate Tribunal (NCLAT).
"The Company has been served with an appeal on behalf of IDBI Bank Limited against the Company before the NCLAT, Delhi, challenging the order dated August 10, 2023, passed by NCLT, Mumbai Bench, approving the composite scheme of arrangement amongst Zee Entertainment Enterprises Limited, Bangla Entertainment Private Limited and Culver Max Entertainment Private Limited (formerly known as Sony Pictures Networks India Private Limited)," it said.
In December 2021, Sony and ZEEL signed definitive agreements to merge. As per the deal, after the merger Sony will indirectly hold a majority of 50.86 per cent of the new entity, while the founders of ZEEL will hold 3.99 per cent. Other ZEEL shareholders will hold a 45.15 per cent stake.
As per estimates, after ZEEL merges with SPNI, the new entity will have a cash balance of $1.5 billion at closing, including through an infusion by the current shareholders of SPNI and the promoters (founders) of ZEEL.
The deal, which has already received approvals from the stock exchanges, the Securities and Exchange Board of India, and the Competition Commission of India, would create the country’s largest media and entertainment company. It would be the country’s largest TV network company with a 26 per cent market share.
The merged entity would have over 70 TV channels, two video streaming services (Zee5 and SonyLiv) and two film studios (Zee Studios and Sony Pictures Films India).
In an interim order on June 12, Sebi had prohibited Subhash Chandra, chairman of Essel Group, and his son Punit Goenka from assuming directorial or major managerial positions due to alleged misuse of funds from Zee for personal gain.
The Securities Appellate Tribunal upheld Sebi’s interim order, imposing a one-year restraint on Zee promoters Chandra and Goenka from holding board positions in publicly listed companies, citing alleged fund diversion.
On August 30, SAT refused to offer interim relief to former Zee chief Punit Goenka, who was barred by Sebi from holding key positions within four Zee group firms and in the merged entity of ZEEL and Sony Pictures Networks India.
Shares of Zee Entertainment Enterprises ended at Rs 274.50, up by 3.33 per cent.
Also read: ZEE, Equitas SFB, Coforge, City Union Bank: How MF favourite stocks fared in 2023