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HomeScience/TechnologyIdbi Bank Moves Nclt Against Zee Entertainment On Rs 149 Crore Default

Idbi Bank Moves Nclt Against Zee Entertainment On Rs 149 Crore Default

Zee Entertainment disputes the bank’s claims in other proceedings initiated by the bank and sees no financial consequences of this.


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IDBI Bank, financial creditor of Zee Entertainment Enterprises Ltd. has petitioned the National Company Law Tribunal (NCLT) for default of Rs 149.6 crore.

The lender has also requested that insolvency proceedings be initiated against the company.

IDBI Bank’s claims arise from a debt service agreement between the bank and the company for a financial facility used by Siti Networks. Zee Entertainment is a party to the Debt Service Reserve Account Guarantee Agreement.

Essel Media Ventures currently holds a nearly 5 percent stake in Siti Networks, following the September shareholding pattern.

This is not the first time the company has been dragged to the NCLT over a default related to Siti Networks. In February this year, IndusInd Bank had moved the Mumbai bank from the tribunal due to default of Rs 83 crore.

Zee Entertainment disputes the bank’s claims in other proceedings initiated by the bank and sees no financial consequences of this.

Brokerage firm Credit Suisse believes the scope of the dispute is immaterial and therefore unlikely to meaningfully delay the merger approval process with Sony. The company further added that while it may take a little longer for Zee’s ad revenue to pick up, legacy issues are unlikely to delay the merger.

Credit Suisse has an outperform rating on Zee Entertainment with a price target of Rs 300.

Shares of Zee Entertainment are down nearly 20 percent year to date.

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