Why Zee Is Withdrawing NCLT Plea To Implement Merger Deal With Sony Units?

The board takes the decision after seeking appropriate legal advice and reviewing the recent action-oriented steps implemented by Zee’s management
Why Zee Is Withdrawing NCLT Plea To Implement Merger Deal With Sony Units?

Zee Entertainment Enterprises Ltd. said its board approved withdrawing the company’s application for merger implementation with Sony Group’s Indian units from the National Company Law Tribunal (NCLT).

The board took the decision after a detailed consultation with legal experts and reviewing the recent action-oriented steps implemented by the management, the Indian media and entertainment company said in a stock exchange announcement.

The Mumbai-based company filed the merger implementation application with the NCLT on 24 January, seeking directions on the implementation of the composite scheme of arrangement between Zee and Sony units, namely Culver Max Entertainment Private Ltd. and Bangla Entertainment Private Ltd.

The development came after Sony units scrapped their proposed merger with Zee, as well as invoked the arbitration clause and sought a termination fee of $90 million from Zee alleging the company breached the terms of the agreement signed in December 2021.

This promoted Zee to also initiate legal proceedings to contest against Sony's claims in Singapore as well as file an application with the NCLT to implement the $10 billion scrapped merger deal.

Fight To Continue

Zee said its decision to withdraw the merger implementation application from the NCLT will enable the company to pursue growth and evaluate strategic opportunities to generate higher value for all shareholders.

“The immediate priority for the company is to focus on performance and achieve its targeted goals for the future,” Zee Chairman R. Gopalan said. “Hence, after seeking an independent legal opinion, the board has advised the management of the company to withdraw the implementation application…”

Zee, however, will aggressively pursue all its claims against Sony in the ongoing arbitration proceedings at the Singapore International Arbitration Centre (SIAC) and in other forums.

Gopalan said the board remains focused toward maximizing shareholder value, strengthening Zee’s claims in arbitration and enabling the company to explore strategic opportunities.

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