IDBI Bank’s Insolvency Plea Request Against Zee Entertainment Rejected By NCLT

On Friday, the insolvency plea filed by IDBI Bank against Zee Entertainment was dismissed by the National Company Law Tribunal (NCLT). The bank had applied for insolvency proceedings to recover dues worth Rs 149.60 crore. 

IDBI Bank appealed to the NCLT in December last year, claiming an amount of Rs 149.60 crore. The amount was disputed between IDBI Bank and Zee Entertainment. 

Zee informed the stock market in December 2022 that IDBI Bank, which claimed to be a financial creditor, had filed a petition before the Mumbai bench of the NCLT. IDBI claimed an amount of Rs 149.60 crore, which was disputed by Zee. In its application, IDBI requested the commencement of the Corporate Insolvency Resolution Process against Zee. 

Zee Entertainment Enterprises began settlement talks with its creditors to repay debts to complete a merger with the Sony Group, forming a USD 10 billion media conglomerate, according to a report. 

According to the report, Zee had offered to repay a loan of about Rs 1.49 billion to IDBI Bank in tranches. In addition to IDBI, the Zee founders are engaging in conversations with Axis Bank and JC Flowers’ asset reconstruction unit to resolve outstanding payments of approximately Rs 400 million each, which are owed to entities under their control.   

It is pertinent for Zee to repay its outstanding debts to continue the merger process with Sony. Once the deal is completed, Sony Picture Network India will own a little over half of the shares. 

At the time of the merger announcement, Atlanta-based Invesco Developing Markets Fund owned the largest shares of Zee with an 18 per cent stake.