ZEE-Sony merger: Zee Entertainment shells out Rs 176 cr on proposed deal

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Zee Entertainment Enterprises (ZEEL) said it has spent Rs 176.2 crore (Rs 1,762 million) on its proposed merger with Culver Max Entertainment (Sony Pictures Networks India). According to the company’s regulatory documents, it spent about Rs 7.3 crore on merger-related expenses in the last financial year.

In December 2021, Zee Entertainment Enterprises announced a mega merger with Culver Max Entertainment (Sony Pictures Networks India) that will bring 75 channels, two video streaming services (Zee5 and SonyLiv) and two movie studios (Zee Studios and Sony Pictures Films India). ) under one entity. Punit Goenka, MD and CEO of ZEEL, is slated to head the merged entity.

“To speed up the merger process, the company has settled certain objection applications/insolvency proceedings by existing creditors and bankers for a total of Rs 2,230 crore. [Rs 223 crore] (Rs. 1,960 crore has already been disbursed). Accordingly, an additional payment of 270 million rupees (27 million rupees) has been recorded as a special item. Under this integration program, it has spent Rs 1,762 crore with expenses. The company said in its annual report for the fiscal year ended March 31.

“Pursuant to the approvals and conditions of the Merger Cooperation Agreement (“MCA”), management is in the process of liquidating or selling the entities that are not part of the above-mentioned merger program. These entities are accounted for in accordance with IND AS 105 (“Non-current assets held for sale and discontinued operations”). / are classified as disposal assets, their fair value and an impairment loss of Rs 3,313 million has been recorded as a special item in the financial statements.

The company announced that Bangla Entertainment and Sony India have constituted a special merger executive committee to review and approve the agreements, terms, reports and any other documents relating to the merger between the company and their shareholders and creditors.

In the year Effective March 31, 2023, the Executive Committee of the Special Merger will consist of Adesh Kumar Gupta, Director. Punit Goenka, Managing Director & CEO; Mukund Galgali, Principal, Business and Strategic Initiatives; and Vikas Somani, Head – M&A and Business Development.

The committee was formed to consider the appointment of a consultant, auditor, valuer or attorney to assist the company in the execution of the merger.

The merger of Zee and Culver Max has been approved by the National Company Law Tribunal (NCLT). But Goenka had to resign after the Securities and Exchange Board of India (Sebi) order barred him from holding any management position in the company and other firms. On October 30, Sebi’s order was stayed by the Securities Appellate Tribunal (SAT).

Earlier this month, it was reported that merger talks between Zee Entertainment Enterprises and Sony Pictures hit a roadblock due to Sony’s last-minute request to have its own executive lead the combined entity, unlike in previous deals. Punit Goenka.

Sonny Goenka has reportedly been asked to step down as MD and CEO of the merged entity pending clearance by market regulator Sebi.

As per the ownership structure agreement, SPNI was to hold 50.86 per cent of the merged entity, its promoters (the Gonka family) 3.99 per cent and the remaining 45.15 per cent with public shareholders.

In June, Goenka told shareholders that the Zee-Sony merger would be completed “with or without him” under his leadership. At the time, SEBI had suspended Goenka from the boards of Zee Group after investigations revealed that Goenka and Chandra had fraudulently obtained loans by withdrawing their money from ZEEL.

Shares of ZEEL were trading up 0.85 percent at Rs 255.05 at 11.30 AM.

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