NCLT approves Zee-Sony merger; Zee stock gains 18%
The National Company Law Tribunal (NCLT) has given the green light for the merger of Zee Entertainment Enterprises Ltd. and Sony Pictures (Culver Max Entertainment). The approval has set the stage for India's second-largest media and entertainment powerhouse. It has come nearly two years after the merger was first announced in December 2021. Zee's share prices surged nearly 18% after the order.
Sony will own about 51% of the merged entity
The Securities Exchange Board of India, Competition Commission of India, National Stock Exchange, and BSE Ltd. had already granted their approvals for the merger. As part of the deal, Sony will own a 50.86% stake, Zee promoters will hold 3.99%, and other Zee shareholders will have a 45.15% stake in the combined entity. The merged entity will have $1.5 billion in its coffers.
The merger was challenged by multiple creditors
Several financial and operational creditors had challenged the merger at the NCLT, filing pleas to initiate corporate insolvency resolution processes against Zee. These creditors, including IDBI Bank, IndusInd, Axis Finance, and JC Flower ARC, argued that Zee had outstanding loans. Zee has since reached settlements with some creditors, such as IndusInd and JC Flower, while insolvency petitions from others are pending.
