Entertainment <\/p>\n
\n\tIndia\u2019s National Company Law Tribunal on Wednesday agreed to the beginning of insolvency proceedings against Zee Entertainment Enterprises<\/a> Limited (ZEEL) and group company Siti Network, filed by IndusInd Bank.<\/p>\n \n\tThe bank is seeking payment over a default of INR890 million ($10.7 million). Siti and Zee are part of the Essel Group conglomerate.<\/p>\n \n\tIn 2021, Culver Max Entertainment (Sony<\/a>) and ZEEL signed definitive agreements<\/a> to merge and combine their linear TV networks, digital assets, production operations and program libraries. The merger is understood to be in the last stages of completion.<\/p>\n \n\t\u201cWe remain committed towards the proposed scheme of amalgamation for the merger of Zee Entertainment Enterprises Ltd. with and into Culver Max Entertainment Pvt. Ltd. We will continue to take all the required measures to achieve a timely completion of the same, guided by legal advice, in the interest of our stakeholders, who have recognized the value and potential of the merger,\u201d said a statement from ZEEL MD and Punit Goenka shared with Variety<\/em>.<\/p>\n \n\tZee is likely to challenge the insolvency proceedings with the National Company Law Appellate Tribunal (NCLAT). ZEEL share value fell by 14.4% on Thursday in reaction to the insolvency proceedings news.<\/p>\n \n\tThe proceedings could delay the merger but is unlikely to scupper it, according to media analyst Karan Taurani of Elara Securities. <\/p>\n \n\t\u201cWe believe there is little, or no likelihood of the merger being called off, as the linear TV industry is going through concerns, which has impacted growth rates for Sony too. There may be a delay in terms of timeline for the merger process to go through, which could be anywhere in a wide range of 3-12 months, basis outcome of the other pending liability cases\/Zee\u2019s appeal with NCLAT. We thereby believe that Zee remains to be a compelling buy, if one were to factor that the merger will go through in the medium term with synergies in the linear TV and OTT business,\u201d Taurani said, also pointing to Zee\u2019s hefty cash balance of INR7 billion, with a further INR 120 billion to be infused post-merger with Sony.<\/p>\n