Zee Entertainment stock price down after NCLT admits insolvency proceedings

23 Feb 2023 , 01:31 AM

In early trade on Thursday, shares of Zee Entertainment Enterprises (ZEEL) fell by as much as 14% after the National Company Law Tribunal (NCLT) accepted insolvency petition filed by IndusInd Bank against the company and admitted it into the corporate insolvency resolution process.

The bankruptcy court’s order came in response to IndusInd Bank’s petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016. (IBC)

According to a report, the move has likely overshadowed ZEEL’s merger with Culver Max Entertainment (Sony), because after the initiation of insolvency proceedings, schemes such as mergers and amalgamations will not be possible until ZEEL’s promoters settle their debts with the lender, according to the report, citing an expert.

In December 2021, Sony and ZEEL decided to merge their television channels, film assets, and streaming platforms, prompting IndusInd Bank to file a default claim against ZEEL with the NCLT.

Furthermore, some ZEEL lenders, including IndusInd, Axis Bank, and IDBI Bank, have filed a petition with the NCLT opposing the merger with Sony. According to reports, the banks believe ZEEL should first clear its debts before proceeding with the merger.

At around 1.23 PM, Zee Entertainment Limited was trading 8.46% lower at Rs188.90, against the previous close of Rs206.35 on NSE.

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