zee share Entertainment (ZEEL) had hit its previous 52-week low at Rs 200.50 on June 20, 2022. With today’s fall, the stock is now down 43 per cent from its 52-week high of Rs 308.65, which was touched on April 4, 2022.
The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday admitted media company Zee Entertainment Enterprises Ltd (ZEE), an insolvency petition filed by its financial creditor IndusInd Bank under Section 7 of the Insolvency and Bankruptcy Code (IBC).
IndusInd Bank in its petition has claimed a default of Rs 83.08 crore against the Subhash Chandra-promoted media and entertainment firm. As per reports, the court has appointed Sanjay Kumar Jhalani as the interim resolution professional.
The bankruptcy court accepted a petition filed earlier by IndusInd Bank, which had moved the court seeking payment of over Rs 83 crore from ZEEL. This came after ZEEL failed to meet obligations under the Debt Service Reserve (DSR) account agreement.
Under the terms of the DSR account agreement, which was signed between the lender and Citi Networks (another Essel Group firm), ZEEL was also a party to it. ZEEL had guaranteed to maintain an amount equal to one-fourth of the interest and one-fourth of the principal amount in the account to repay the loan, but failed to do so.
Citi Networks, formerly Wire & Wireless, is a multi-system operator promoted by the Essel Group.
The court has also accepted IndusInd’s insolvency petition against Citi Networks and appointed an interim resolution professional.
According to IndusInd Bank’s plea, Citi had failed to maintain the account since September 2019 with an outstanding amount of Rs 89 crore. It had also said that ZEEL, being the guarantor, should also be made a party in the matter.
ZEEL had said that IndusInd Bank’s plea was in “violence or violation” of previous orders passed by the Delhi High Court. The company had moved an application before the NCLT in February 2022, requesting it to dismiss IndusInd Bank’s plea.
In January, the Indian Performing Right Society (IPRS), an operational creditor of ZEEL, filed an insolvency petition against the media firm before the NCLT Mumbai bench, claiming a loan of Rs 211.42 crore. On its part, ZEEL had said that the creditor is claiming debt and default towards royalty payable for the use of “literary and musical works”.
In the third quarter, the media company reported a 92 per cent year-on-year decline in consolidated profit at Rs 24.31 crore, hit by weak operating performance, lower topline and extraordinary loss (Rs 168.97 crore).
Consolidated revenue from operations fell 0.07 per cent at Rs 2,111.2 crore, down 15.6 per cent in the year-ago period compared to lower advertising revenue.
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