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Shares of Zee Entertainment Enterprises (ZEEL) moved higher by 8 per cent to Rs 204.25 on the BSE in Thursday's intra-day trade on report that the company has agreed to pay dues to IndusInd Bank. Besides, the lender has likelya greed to withdraw the insolvency case.
"ZEEL has agreed to repay dues owed to IndusInd Bank as the company seeks to resolve insolvency proceedings initiated against it, and inch closer to completing a merger with a Sony Group unit to create a $10 billion media giant," a Bloomberg report said.
The settling of dues of about Rs 83.7 crore ($10 million) to the lender could happen as early as Friday, and the Mumbai-based bank has agreed to withdraw its insolvency proceedings against the media company once the repayment is made, the news agency reported. CLICK HERE FOR FULL REPORT
Last month, on February 24, the National Company Law Appellate Tribunal (NCLAT) decided to put a stay on the National Company Law Tribunal (NCLT) order admitting insolvency proceeding against ZEEL. The case will be heard on March 29.
Siti Networks (sister concern of ZEEL) had taken a loan from IndusInd bank wherein ZEEL stood as a guarantor. Since Siti Networks was unable to pay, IndusInd bank invoked the guarantee and made ZEEL a party to it. Amount under consideration is Rs 83.1 crore.
ZEEL is one of the largest listed media companies in India, which owns and operates a bouquet of 49 TV channels across 11 languages and also an OTT app Zee5.
In the past three months, ZEEL has underperformed the market by falling 19 per cent as concerns of the ongoing arbitration issue delaying the merger timeline with Sony Pictures Networks India Private Limited (SPNI), weighing on the sentiment. In comparison, the S&P BSE Sensex was down 6 per cent during the period. The underperformance of the stock was also owing to promoter debt issue and business challenges.
"Key triggers for future price performance are turnaround in some key regional markets like Tamil/Marathi as well as Hindi GEC, where it has lost viewership market share. This would also drive a recovery in margin performance and cash flow generation," analysts at ICICI Securities had said in a December quarter result update.
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First Published: Thu, March 16 2023. 14:39 IST
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