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Zee Entertainment Enterprises Ltd on Wednesday informed the National Company Law Appellate Tribunal (NCLAT) that it has entered into a settlement agreement with IndusInd Bank, inching a step closer  to its deal with Sony Pictures (Culver Max Entertainment). A detailed order in the matter is awaited.  

As a part of the agreement, the first tranche of settlement amount has been paid while the second tranche will be paid by June 30, the media company’s counsel informed the tribunal. The settlement amount however, has not been disclosed by the company.  

On the other hand, IndusInd also informed the appellate tribunal that it would withdraw its insolvency petition which essentially also opposed the company's merger with Sony.   

Separately, insolvency applications by Axis Finance and IDBI against ZEE are pending before the bankruptcy court. 

In February, the National Company Law Tribunal (NCLT) had admitted an insolvency petition against ZEE by IndusInd under Section 7 of the Insolvency and Bankruptcy Code (IBC). This order, however, was immediately challenged by Punit Goenka, before the appeals court. 

The NCLAT in its verdict granted relief to the Subhash Chandra- owned media company by staying the insolvency proceedings initiated by IndusInd Bank.  

At the same time, the dedicated bankruptcy court had also admitted a similar insolvency application against Essel Group’s Siti Networks Ltd, filed by the same financial lender.

The matter pertains to a loan taken by Siti Networks, where ZEE was the guarantor of the loan under the terms of the Debt Service Reserve Account Guarantee Agreement (DSRA) on 29 August 2018.

On 1 October 2020, IndusInd Bank issued a notice to ZEE invoking the DSRA agreement and asked it to pay 83.7 crore. The media firm claimed that the bank made the demand for an accelerated amount which was the entire loan amount advanced by the bank to Siti on account of the shortfall in the DSRA Account.

IndusInd and ZEE were locked in a legal tussle wherein the private lender was seeking payment of its dues.  

It started in 2021, when IndusInd had first approached the Delhi High Court and later last year in February it filed a case against ZEE under section 7 of the Insolvency and Bankruptcy code for initiating corporate insolvency resolution process against it for seeking payment of dues worth 90 crore.  

Meanwhile, by mid March, the National Company Law Tribunal (NCLT) had allowed the Indian Performing Right Society Ltd (IPRS), an operational creditor of Zee Entertainment Enterprises, to withdraw its insolvency petition against the company. 

Earlier in January, IPRS moved the NCLT against ZEE claiming a default of 211.41 crore.The media firm on Thursday informed the exchanges stating that Zee and IPRS have amicably settled all the disputes and claims between the two.

As far as as the ZEE Sony merger is concerned it has received shareholders approval and also the CCIs approval. 

ABOUT THE AUTHOR
Priyanka Gawande
Priyanka Gawande is a senior legal correspondent at Mint. She has worked as legal reporter for four years with both television and digital mediums. Based in Mumbai, she reports on disputes across sectors including banking, corporates and finance. This also includes insolvency and bankruptcy cases and intellectual property rights (IPR) litigation. Her focus also comprises tracking capital markets and disputes relating to securities law. Previously, Priyanka worked with Informist Media for 2.5 years covering major insolvency and bankruptcy cases and corporate developments. She started her career in journalism with Business Television India (BTVi) where she reported on primary markets, banking, finance and insurance companies.
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Updated: 29 Mar 2023, 07:17 PM IST
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