NCLT Approves $10 Billion Zee-Sony Merger
In a significant development, the National Company Law Tribunal (NCLT) has granted its long-awaited approval for the mega-merger between two of India's leading entertainment giants, Zee Entertainment Enterprises and Culver Max Entertainment (formerly Sony Pictures Networks India, or SPNI).
The eagerly awaited approval from NCLT marks a significant milestone for the merger, which was initially announced back in 2021. The approval comes after the tribunal carefully reviewed the merger scheme and addressed objections raised by various lenders, including Axis Finance, JC Flowers Asset Reconstruction Co, IDBI Bank, Imax Corp., and IDBI Trusteeship. In a decisive move, the bench comprising Justice HV Subba Rao and member Madhu Sinha not only gave their nod to the merger scheme but also dismissed all raised objections.
The official order will be made available on the NCLT website by Friday, following the bench's decision to reserve the order on July 10th.
With this favorable ruling, the merging companies are poised to commence the integration process as early as the upcoming week. Zee Entertainment Enterprises will have a 30-day window to file with the registrar of companies. Subsequently, the company's shares will be delisted from stock exchanges, and within six weeks, the newly merged entity will be relisted.
Although no official statement has been released regarding the expected completion date of the merger, experts in the field of mergers and acquisitions anticipate a potential mid-November timeline.
In the midst of these developments, Zee Entertainment Enterprises awaits a decision from the Securities and Exchange Board of India (SEBI), the market regulator. SEBI had previously imposed a restriction on Punit Goenka, the MD and CEO of ZEE, barring him from holding key managerial positions in any listed company.
A noteworthy condition of the merger is that Punit Goenka will continue in his role as MD and CEO of the amalgamated entity. In an earlier conversation, Goenka emphasized his commitment to ensuring the merger's successful completion, regardless of his position. “The merger is of utmost importance to me, and I am wholly dedicated to its success. The merger's progress is my primary focus, regardless of my role as CEO,” Goenka had affirmed.
It's pertinent to mention that subsequent to a directive from the Securities Appellate Tribunal, the SEBI chairperson engaged with Punit Goenka to hear his response to the ex-parte order issued by the regulatory body on July 12th. A final decision from SEBI is expected on Monday, August 14th. Should Goenka receive a favorable ruling from SEBI, his leadership as MD and CEO of the country's second-largest entertainment network will be secured.
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