In the previous fiscal year, merger-related expenses stood at Rs 7.3 crore. The two companies had signed definitive agreements to merge their businesses in December 2021.
The merger agreement, which has received all the requisite regulatory approvals, is stuck due to Sony’s insistence on having its own executive SPNI MD & CEO, NP Singh, as the CEO of the proposed Sony-Zee joint entity since Punit Goenka, who is currently the MD & CEO of ZEEL, is still under investigation from the Securities Exchange Board of India (Sebi).
Goenka was slated to be the merged entity’s MD & CEO.
The merger agreement has received approvals from stock exchanges, the Competition Commission of India, and the National Company Law Tribunal.
ZEEL also said it is in the process of making an application with the Ministry of Information and Broadcasting for the transfer of TV channel licences obtained by the company to Sony.As per the company’s annual report for FY23, the company has settled certain objection applications/insolvency proceedings filed by operational creditors and bankers for a total amount of Rs 223 crore, with Rs 196 crore already being provided and an additional Rs 27 crore being recorded as an exceptional item.The company said it entered into settlement agreements with IndusInd Bank, Indian Performing Right Society (IPRS), and Standard Chartered Bank to expedite the merger process with Sony.
IndusInd and IPRS had filed corporate insolvency resolution processes against ZEEL, claiming defaults of Rs 83.08 crore and Rs 211.41 crore, respectively.
Standard Chartered had sanctioned certain credit facilities to Siti Networks, which were secured by the debt service reserve account (DSRA) support and undertaking of ZEEL.
The media conglomerate also said that the management is in the process of either liquidating or selling assets, not forming part of the scheme of merger as per the condition precedents of the Merger Co-Operation Agreement (MCA).
It added that an impairment loss of Rs 331.3 crore has been recorded in the financial statements pertaining to these assets, which primarily include Margo Networks (Sugarbox).
As per the MCA, the ZEEL board, in its meeting on November 11, 2022, also approved the termination of the ZEEL ESOP Scheme 2009 with immediate effect.
ZEEL also disclosed that it has formed a Special Merger Implementation Committee to consider and approve the agreements, contracts, reports, and any other documents relating to the merger amongst the company, Bangla Entertainment and Sony India, and their respective shareholders and creditors.
As of March 31, 2023, the Special Merger Implementation Committee is comprised of Adesh Kumar Gupta, Director; Punit Goenka, Managing Director & CEO; Mukund Galgali, Chief, Commercial & Strategic Initiatives; and Vikas Somani, Head – M&A and Business Development.
The committee has also been delegated to appoint a consultant, auditor, valuer, or lawyer to assist the company in the implementation of the merger and delegate all or any of such powers and authorities to any other employee or representative of the company, as may be deemed necessary to give effect to the merger.
