BackInsolvency case: NSE says Zee Ent to move out of IBC framework, F&O contracts for May expiry to be made available
NSE's take on ZEE Entertainment for F&O trading comes after NCLAT stayed on the insolvency proceedings initiated against the company by the bankruptcy court over a loan default from private lender IndusInd Bank.
PremiumAmidst the stay order of NCLAT on the insolvency proceedings, the National Stock Exchange of India (NSE) on Monday said, Zee Entertainment (ZEEL) shall move out of the IBC framework and the corresponding surveillance actions on the company will be reverted. Also, the exchange informed that futures and options contracts for May 2023 expiry will be made available for trading in ZEEL from February 28th.
In a notice, NSE said, "NCLAT, Principal Bench, New Delhi... has granted a stay on the NCLT, Mumbai Bench, Court III order... w.r.t IBC proceedings initiated against Zee Entertainment Enterprises Ltd (ZEEL)."
Accordingly, NSE said, "the scrip ZEEL shall move out of the IBC framework and the corresponding surveillance actions on ZEEL shall be reverted."
In regards to F&O trading, NSE said, " in addition to existing contracts with expiry months of March 2023 and April 2023, the futures and options contracts with May 2023 expiry shall be made available for trading w.e.f February 28, 2023."
NSE advised members to load the updated contract file in the trading application before trading on February 28, 2023.
On NSE, ZEEL's share price closed at ₹182.55 apiece down by 6.65%.
Last week, NCLAT stayed the insolvency proceedings initiated against it by the bankruptcy court over a loan default from private lender IndusInd Bank.
Admitting a petition filed by Punit Goenka, the chief executive of ZEEL, the appellate tribunal issued notices to IndusInd bank and the interim resolution professional directing them to file a reply in two weeks.
Earlier, NCLT Mumbai admitted a petition filed by IndusInd Bank Ltd to initiate insolvency proceedings against ZEEL.
The NCLT's decision for insolvency proceedings is regarding a loan default of ₹89 crore by Zee Group's multisystem operator arm Siti Networks borrowed from IndusInd Bank. ZEEL was the guarantor of this loan.
IndusInd Bank also filed a separate insolvency petition against Siti Networks at the NCLT.
The NCLT's decision comes when ZEEL is in the advanced stages of merging with Sony in one of the biggest deals in the media and entertainment sector.
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