Final Hurdle: Zee Entertainment Begins Settlement Talks With Creditors To Clear Way For Sony Merger

Zee Entertainment Enterprises Ltd. (ZEEL) has initiated settlement discussions with its creditors to pay off its debts and eliminate what could be the last barrier in its merger with Sony Group, which is expected to create a media giant worth $10 billion (₹82,158.31 crore).

What Happened? Per a Bloomberg report, Zee has proposed repaying IDBI Bank Ltd. in tranches, offering to pay off a loan of around ₹149 crore ($18.1 million). Zee’s founders are also in separate discussions with Axis Bank and JC Flowers & Co.'s asset reconstruction unit to settle dues of ₹40 crore each owed to entities they control.

These repayments are critical to the merger, which will create a media firm with the most significant viewership and pricing power in India.

Sony Pictures Networks India Pvt. will own just over half of the shares once the deal is completed, and Zee’s founders will hold 3.99%, while the rest will be distributed among public shareholders.

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Over the past few months, a number of ZEEL’s creditors had been approaching the country’s bankruptcy court to seek repayments, and the company recently paid dues to one creditor, IndusInd Bank, in full, enabling the bank to withdraw its objections against the merger.

According to exchange filings, Atlanta-based Invesco Developing Markets Fund, which held the most significant stake in Zee at 18% at the time of the merger announcement, has sold its entire holding in the company.

The merger agreement, which is now sixteen months old, was approved by India’s antitrust regulator back in October 2022.

Price Action: Share price of Zeel was down 0.63% to close at ₹196.80 on Thursday.

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Posted In: EntertainmentM&AGeneralSony GroupZEEL