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Just as the merger between Zee Entertainment Enterprises and Culver Max Entertainment (Sony) nears the deadline for completion, several creditors have approached the National Company Law Tribunal (NCLT) to file an objection.
IDBI Bank, which filed an insolvency plea against Zee at NCLT, Mumbai, also informed about its intention to file an objection against the Zee-Sony merger. Axis Bank and IndusInd Bank, too, have approached the NCLT in the same proceedings.
The merger has already received approval from NCLT, CCI and shareholders.
Insolvency plea
Zee, in its exchange filing on Wednesday, disclosed that an application was filed by IDBI Bank in the insolvency court, claiming to be one of the creditors of the company. The application was filed for the resolution of a claim of around ₹150 crore. The bank’s claim comes from a debt service agreement between promoter-backed cable company Siti Networks Ltd and IDBI Bank. Under the agreement, Zee acted as a guarantor for a loan that IDBI gave to Siti, according to Zee’s disclosure.
In a bid to claim payments from Zee under similar debt service agreements, Axis is seeking ₹150 crore for money owed by three Essel Group companies — Primat Infrapower, Multiventures Pvt and Cyqyator Media Services Pvt. Axis had earlier raised concerns at the NCLT and the Bombay High Court. IndusInd bank, too, approached the insolvency court previously for an ₹89-crore debt under a similar agreement.
Proxy advisory analysts note that the creditors’ actions are unlikely to derail the merger at such a late stage. Shriram Subramanian, MD of InGovern Research Services, a corporate governance advisory firm, said, “The debt obligations are not that of Zee. The lenders seem to be putting pressure on Zee and its promoters at the last minute of the merger process. These tactics are unlikely to sway the NCLT to derail the merger.”
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