Shares of Zee Entertainment Enterprises Ltd fell in Friday's trade after the media firm announced Walt Disney-owned Star India has initiated arbitration proceedings against it for alleged non-compliance with the terms of a cricket broadcasting agreement.
The stock slipped 4.11 per cent to hit a day low of Rs 141.20. At this price, Zee shares have more than halved from their one-year high value of Rs 299.50, a level seen last year on December 12.
"Star has initiated arbitration proceedings against the company, under the alliance agreement dated August 26, 2022, by filing a request for arbitration under the rules of the London Court of International Arbitration," Zee said in an exchange filing.
It mentioned that Star claimed that Zee is in non-compliance with the terms of the alliance agreement for setting out the basis on which Star would be willing to grant the sub-license rights for the ICC men's cricket events from 2024 to 2027.
The Disney-owned company has sought specific performance of the alliance agreement (or alternatively, to pay damages, which are yet to be determined), Zee further stated.
Earlier on January 22 this year, Japan's Sony Pictures terminated the $10 billion merger with Zee. Sony and Zee officially called off the planned media merger after two years of drama and delay.
ZEE shares today saw heavy trading volumes as 19.05 lakh shares were seen changing hands on BSE. The figure was higher than the two-week average volume of 14.03 lakh shares. Turnover on the counter came at Rs 27.46 crore, commanding a market capitalisation (m-cap) of Rs 13,764.24 crore.
As of December 2023, promoters held a 3.99 per cent stake in the media firm.