Zee’s insolvency proceedings halted by Indian appeals tribunal

AN Indian appeals court stopped the insolvency proceedings against Zee Entertainment Enterprises in a major respite for the media company after a local bankruptcy court initiated the process two days back.

The National Company Law Appellate Tribunal, or NCLAT, said on Friday (Feb 24) that Zee’s appeal challenging bankruptcy court’s Feb 22 order requires detailed hearing. The tribunal will hear the case again on March 29.

The NCLAT order comes as a relief for Zee which is closing a merger with a wholly-owned subsidiary of Sony Group to create a US$10 billion media giant. The insolvency proceedings, started this week due to a petition from one of Zee’s financial creditors with unpaid dues, threatened to jeopardise the merger as it would have stopped all transactions, including asset transfers.

Zee’s shares rose as much as 3.1 per cent on Friday after an intra-day drop of 14 per cent the day before, data compiled by Bloomberg show.

Zee remains “committed toward protecting the interests of all stakeholders,” Punit Goenka, Zee’s chief executive officer said in an emailed response. “Our focus continues to be on the timely completion of the proposed merger.”

A lawyer representing Zee told NCLAT that the Sony deal had received all other requisite approvals but would be stalled because of the initiation of corporate insolvency proceedings. 

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Zee, Sony unit merger gets approval from India competition regulator

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The merger, which has been in the making longer than the timelines originally indicated by Zee, has been approved by Zee’s shareholders and India’s antitrust regulator. BLOOMBERG