The National Company Law Tribunal (NCLT) was set to give a verdict on the proposed merger of Zee Entertainment Enterprises Ltd (ZEEL) and Culver Max Entertainment Pvt. Ltd also known as Sony Pictures on Thursday.
The day arrived and according to recent reports the NCLT has approved the merger scheme.
Initially, the court has reserved its order on July 10 with the division bench consisting of judicial member HV Subba Rao and technical member Madhu Sinha.
Following that, several financial creditors had expressed their objection to this scheme in the NCLT. The company has then reached a settlement with IDBI Bank, IndusInd Bank, and the Indian Performing Rights Society (IPRS).
Anuj Tiwari, Partner at ASR & Associates who is advising Zee group on merger was quoted saying, “The NCLT’s order rightly rejects the misconceived objections to the scheme, which seems to have been filed solely to arm twist the merging entities. The order paves way for the merger, which is beneficial to all the stakeholders, including the shareholders and the creditors. Quite rightly, the order also upholds and safeguards the interests of all genuine stakeholders.”
Mr. Punit Goenka, M.D. and CEO of ZEEL has earlier talked about how the merger would take place with or without him serving in his current position. And now, according to the merger agreement, Goenka will serve as the combined company’s MD and CEO for a five-year period.
A report in Economic Times mentioned that back in December 2021, Sony and ZEEL signed definitive agreements to merge. Sony will indirectly hold a majority of 50.86% of the combined company; the founders of ZEEL will hold 3.99%; and the other ZEEL shareholders will hold a 45.15% stake.
After a few other developments and the BSE and NSE approving the merger scheme; on October 5, 2022, the Competition Commission of India (CCI) gave conditional approval to the merger and asked ZEEL to sell three Hindi channels—Big Magic, Zee Action, and Zee Classic—to address possible anti-competition concerns arising out of their proposed mega-merger deal.
Finally, on October 14, ZEEL shareholders approved the proposed merger of ZEEL and Bangla Entertainment, an SPNI subsidiary, with and into Culver Max Entertainment.
Following this news, Zee Entertainment’s stock that was trading at Rs 278.40 on BSE, rose by 15%.
