Zee retracts NCLT plea for Sony merger implementation
After extensive consultation with legal experts, the board decided to withdraw the plea based on their advice and guidance
Sumit Rawat
On Tuesday, Zee Entertainment announced the withdrawal of its merger implementation application from Mumbai's National Company Law Tribunal (NCLT), ending its legal battle against Sony initiated on January 24. The decision, based on legal advice after thorough consultation, aims to focus on growth opportunities and increase shareholder value.
Simultaneously, Zee intends to vigorously pursue claims against Sony in arbitration proceedings at the Singapore International Arbitration Centre (SIAC) and other forums, following Sony's termination of the merger on January 22 and its demand for $90 million in break-up fees.
This move follows a clarification by the National Company Law Appellate Tribunal (NCLAT) that it will proceed with cases related to the defunct Zee-Sony merger. IDBI Bank and Axis Finance had contested the merger, urging the NCLAT to defer proceedings pending the NCLT's decision on Zee's merger enforcement plea.
With Zee's withdrawal from the NCLT, the fate of the NCLAT hearing remains uncertain. Scheduled for May 17, the NCLAT's hearing on merger challenges will proceed as planned.
"The company's immediate focus is on performance and achieving future goals. We've evaluated management's recent steps," stated R Gopalan, Zee's chairman, emphasizing the company's commitment to performance goals.
Recently, Zee announced plans to lay off approximately 15% of its workforce as part of a restructuring led by managing director and CEO Punit Goenka. This restructuring aims to streamline operations, reduce costs, and achieve targeted revenue growth and EBITDA margins by FY26.
