Zee-Sony Deal: Zee Entertainment likely to pay $10M to IndusInd to complete Sony deal
The report said debts of around Rs 837 million could be settled as early as Friday, and the Mumbai-based bank agreed to drop its insolvency case against the media company after the payment was made.
Elara Capital’s Karan Taurani said NCLT’s merger approval may not be forthcoming until cases are resolved or settled at NCLT. The companies recently settled their claims with the Indian Performing Rights Society (IPRS) as the latter withdrew its case to the NCLT. Earlier in January of this year, IPRS filed NCLT’s insolvency suit against ZEEL claiming a default of Rs 211.41 crore.
Outstanding IDBI claims and Hindusind Bank are within Rs 150 crore each of the banks, he said.
“We believe that the acceleration of the settlement will support the Zee-Sony merger as the valuations are strong in the 7-10x forward PER range for the combined company (7x excluding Zee5 and Sony Liv losses),” Taurani added.
The case concerns a default of Rs 89 crore by multi-system operator Siti Networks, owned by the Essel Group. IndInd The bank for which ZEEL acted as a guarantor.
Earlier, on February 24, the National Companies Law Court of Appeal (NCLAT) suspended the insolvency proceedings against ZEEL. After accepting a motion filed by ZEEL Managing Director and CEO Puneet Goenka, the Court of Appeal sent notices to the private sector creditor. HinduInd Bank and an interim professional resolution directing them to file a response within two weeks.
On February 22, a panel of judges at the Mumbai National Companies Court (NCLT) accepted IndusInd Bank’s application for insolvency proceedings.
He also appointed an interim solutions specialist after the suspension of the board.
The NCLAT order was a major breather for ZEEL, which is merging with rival Culver Max Entertainment, formerly known as Sony Pictures Networks India, to create India’s largest media empire.
The company has received the necessary approvals from shareholders, creditors, stock exchanges and the Chamber of Commerce and is awaiting final approval from the NCLT.
(with the participation of the agency)