Sony Group has said that the completion of the merger between Zee Entertainment Enterprises Ltd. and Culver Max Entertainment, which is Sony Pictures Networks India, will take a few more months, Reuters reported on Friday. The much-awaited Zee-Sony merger was previously expected by the end of September.
The Zee-Sony merger was approved by the National Company Law Tribunal (NCLT) on August 10 this year, dismissing objections from various creditors to Zee. Several lenders of ZEEL, including IDBI Trusteeship, IDBI Bank, Axis Finance, JC Flowers Asset Reconstruction Co and Imax Corp, had raised objections around the merger.
One of the key conditions of the Zee-Sony merger is that Punit Goenka would continue as the MD and CEO of the merged entity.
The merger, which was announced in December 2021, will bring together over 70 TV channels, two video streaming services (Zee5 and SonyLiv) and two film studios (Zee Studios and Sony Pictures Films India).
In August 2023, the Bombay High Court dismissed an application filed by Axis Finance to implead Zee, Essel Mauritius, and Sony in its commercial summary suit against ZEEL promoter Subhash Chandra Goenka and others. The company was seeking to recover Rs 146 crore from Subhash Chandra Goenka.
Earlier this month, Karan Taurani, senior vice-president, research at brokerage Elara Capital, said the proposed Zee-Sony merger may see the light of day by December.
“The record date for a merger is usually given one week prior to delisting. However, there could be a marginal delay in filing closing precedents (CPs) of the merged entity. Subsequently, relisting may happen in the second week of December 2023 versus the second week of November,” Taurani said.
After the merger, the shareholders would get 85 shares of the merged entity for every 100 shares held in ZEEL. The stock of ZEEL will get delisted and relisted as the merged company after the exchange procedure.
Earlier this month, FTSE announced that once the merger is effective, Sony will promptly replace Zee Entertainment in all FTSE indices.
Zee, of late, has been facing legal hurdles around the proposed merger. On September 14, Axis Finance Ltd moved the National Company Law Appellate Tribunal (NCLAT) against NCLT’s order approving the deal.
In a stock exchange filing, Zee Entertainment Enterprises Ltd said it "has been served with an appeal on behalf of Axis Finance Limited against the Company before the NCLAT, Delhi, challenging the order dated August 10, 2023 passed by NCLT, Mumbai Bench".
Earlier, IDBI Bank had moved NCLAT to challenge the NCLT's approval for the Sony-Zee merger. On September 6, ZEEL told the bourses that the company has been served with an appeal on behalf of IDBI Bank before the NCLAT.
Both the media giants approached the tribunal for sanctioning the merger after obtaining permissions from National Stock Exchange, BSE and sectoral regulators such as the Competition Commission of India and the Securities and Exchange Board of India.
Zee and SAT
In June, Sebi passed an interim order restricting Chandra and Goenka from holding any board or key managerial position in ZEEL, its subsidiary companies or any company resulting from a merger with these companies.
Sebi alleged that the duo helped move funds out of ZEEL and routed them back to the company through layered and circuitous transactions.
The regulator alleged that Chandra and Goenka had "abused their positions" for personal financial gains. It noted that the Mumbai-based media house had faked the recovery of loans to cover private financing deals by its founder Chandra.
Goenka and Chandra appealed against this order at the SAT, but the tribunal refused to stay the same. The father-son duo was directed by SAT to file a reply/objection along with an application to vacate the stay given in the interim order.
On September 27, SAT reserved the appeal made by Chandra and Goenka challenging the Sebi order.
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