Zee Entertainment Enterprises Ltd (ZEEL) provided an update on the status of the $10-billion merger that was terminated by Sony Group’s Indian arm, shedding light on its potential impact on the media firm.
Sony terminated the merger agreement with ZEEL last month, which aimed to merge its two Indian entities, Culver Max Entertainment (previously known as Sony Pictures Network India) and BEPL. Sony Group Corporation (SGC) cited ZEEL’s failure to meet merger conditions and initiated arbitration proceedings before SIAC, seeking a termination fee of $90 million (approximately Rs 748.5 crore).
Earlier this month, ZEEL disclosed that the Singapore Arbitration Centre rejected Sony Group’s request to restrain the Indian media company from pursuing the merger at the NCLT. An Emergency Arbitrator of the Singapore International Arbitration Centre denied interim relief sought by Culver Max and BEPL to halt ZEEL’s actions, citing jurisdictional limitations. The matter is set for a hearing before the NCLT on March 12, 2024.
In its Q3 results announced on Tuesday, ZEEL stated in a stock exchange filing that it believes the claims against the company, including the termination fee, are unfounded and does not anticipate any significant impact. ZEEL also reported a 141% increase in consolidated net profit to Rs 58.5 crore for the quarter ending December 31, 2023. However, its revenue declined by 3% to Rs 2,046 crore in Q3FY24 compared to Rs 2,109 crore in Q3FY23.
The Mumbai bench of NCLT had approved the merger scheme of ZEEL with Sony group entities Culver Max Entertainment and BEPL on August 10, 2023, potentially creating a $10-billion media conglomerate.
