Key Points of Zee and Sony Merger:
- Zee Entertainment Enterprises Ltd is negotiating with its creditors to settle its debts and finalize its merger with Sony Group.
- The Indian TV network is offering to repay a loan of about Rs 1.49 billion ($18.1 million) in tranches to IDBI Bank Ltd.
- Zee’s founders are in separate discussions with Axis Bank Ltd. and JC Flowers & Co.’s asset reconstruction unit to settle dues of 400 million rupees each made to entities controlled by them.
- The merger will create a media company with the largest viewership and pricing power in India, a country with a population of over 1.4 billion people.
- Sony Pictures Networks India Pvt. will own just over half the shares once the deal is finalized, with Zee’s founders holding 3.99% and public shareholders owning the rest.
- Repayments to creditors are crucial for the merger to be completed, as several creditors had been approaching the bankruptcy court seeking repayments.
- Atlanta-based Invesco Developing Markets Fund, which owned the largest chunk in Zee with an 18% shareholding at the time of the merger announcement, has exited its entire holdings in the company as of last week.
Details of Zee and Sony Merger:
Zee Entertainment Enterprises Ltd. has initiated negotiations with its creditors in order to settle its debts and clear the last hurdle to complete its merger with Sony Group, which is expected to create a $10 billion media powerhouse. Sources familiar with the matter say that the Indian TV network has offered to repay a loan of about Rs 1.49 billion ($18.1 million) in tranches to IDBI Bank Ltd., which is one of the creditors that had moved the insolvency court.
The sources also revealed that the founders of Zee are in separate discussions with Axis Bank Ltd. and JC Flowers & Co.’s asset reconstruction unit to settle dues of 400 million rupees each made to entities controlled by them.
The merger between Zee and Sony will create a media company with the largest viewership and pricing power in India, a country with a population of over 1.4 billion people. Sony Pictures Networks India Pvt. will own just over half the shares once the deal is finalized, with Zee’s founders holding 3.99% and public shareholders owning the rest.
The repayments to creditors are essential for the merger to be completed, as several creditors had been approaching the bankruptcy court seeking repayments. Last month, Zee repaid dues to one creditor, IndusInd Bank Ltd., which resulted in the lender withdrawing its objections to the merger, as per a filing by Zee.
Atlanta-based Invesco Developing Markets Fund, which owned the largest chunk in Zee with an 18% shareholding at the time of the merger announcement, has exited its entire holdings in the company as of last week, according to exchange filings. The merger agreement, which is sixteen months old, was approved by India’s antitrust regulator in October.
Representatives for Zee, JC Flowers, and IDBI Bank did not respond to emails and phone calls seeking comments, while a spokesperson for Axis Bank declined to comment.
About Zee:
Headquartered in Mumbai, Zee Entertainment is an Indian media conglomerate that is owned by Essel Group. The company has a diverse range of interests in various fields such as television, print, internet, film, and mobile content-related businesses. With a global reach, Zee Entertainment Enterprises operates 45 channels around the world.
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