NCLT approves merger of Zee Entertainment with Sony India
Ten News Network
New Delhi (India), 10/08/33: The National Company Law Tribunal (NCLT) authorised Zee Entertainment Enterprises Ltd’s proposed merger with Sony India on Thursday, August 10th.
On July 10, the NCLT reserved its decision on the merger of Zee Entertainment Enterprises with Culver Max Entertainment (formerly known as Sony Pictures Networks India).
Zee Entertainment and Sony Pictures agreed to merge their companies in December 2021. Following that, both media companies approached the tribunal to seek merger approval, having already obtained approval from the National Stock Exchange (NSE), Bombay Stock Exchange (BSE), and other regulatory bodies such as the Competition Commission of India (CCI) and the Securities and Exchange Board of India (SEBI).
After hearing arguments from creditors who objected to the scheme, including Axis Finance, JC Flower Asset Reconstruction Co, IDBI Bank, Imax Corp, and IDBI Trusteeship, the Mumbai bench of NCLT, comprised of H V Subba Rao and Madhu Sinha, reserved the judgement last month.
Janak Dwarkadas, the counsel for ZEEL, stated last month that the scheme of arrangement between ZEEL and Sony has been authorised by 99.97% of the company’s shareholders as well as regulatory organisations such as the BSE, NSE, and CCI.
He stated that the total worth of claims raised by creditors opposing to the scheme of arrangement is Rs 1,259 crore, and that they are holding the merger ransom.
ZEE’s overall public shareholding is 96.01 percent, with public institutions controlling 70%. According to him, public non-institutions own around 25.88% of the company, while promoters own only 3.99%.
The Supreme Court maintained Sebi’s interim judgement, which barred Zee Entertainment promoters Subhash Chandra and Punit Goenka from serving on the boards of publicly traded businesses for a year due to alleged financial diversion.
According to the creditors who oppose the merger, the order has a direct bearing because one of the key components of the merger scheme is the appointment of Goenka as Managing Director of the merged business.
Because there is a regulatory prohibition on Goenka having such roles, the merger should not be completed, they submitted last month.
However, according to media sources, the NCLT cleared the Zee-Sony merger and dismissed all objections.
Following the report, Zee Entertainment shares hit the 20% upper circuit at Rs 290.50 on the BSE. However, the stock finished 17.95% higher at Rs 285.55.