ZEEL retracts NCLT application for merge with Sony

Zee Entertainment Enterprises Ltd (ZEEL) has officially withdrawn its application for a merger with Sony from the National Company Law Tribunal (NCLT). The decision was announced in a statement by the company, citing legal advice received by the Board. This move comes after a series of setbacks for the proposed merger, with the deal facing challenges related to leadership issues.

Initially, the merger agreement stipulated that Punit Goenka, the CEO of Zee Entertainment, would lead the merged company. However, disagreements between the two parties, coupled with an investigation by India’s market regulator SEBI into Goenka’s conduct, led to Sony backing out of the merger agreement in January. Sony also sought a termination fee of $90 million, citing alleged breaches by Zee Entertainment.

Following the withdrawal of the merger application, ZEEL stated that this decision would allow the company to focus on pursuing growth and evaluating strategic opportunities to generate higher value for its shareholders. The Board remains committed to reviewing the strategic steps taken by the management and providing timely guidance. The company also mentioned that it will continue to aggressively pursue all its claims against Sony in ongoing arbitration proceedings at the Singapore International Arbitration Centre (SIAC) and other forums.

In the midst of financial challenges, ZEE recently announced a 15% reduction in its workforce. Advertising revenues have also seen a decline, falling by 3% year-on-year to 29.48 billion rupees in the nine months leading up to December 31. Cash reserves have dwindled to 2.48 billion rupees in the six months ended September 30, down from 5.88 billion rupees the previous year.

Overall, the withdrawal of the merger application marks a significant development in the ongoing saga between Zee Entertainment and Sony, with both companies now focusing on their respective paths moving forward.