IndusInd Bank files bankruptcy against Zee over default

Private sector lender IndusInd Bank has filed a bankruptcy case against debt-laden Zee Entertainment with the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC). The case pertains to alleged default of ₹83.08 crore term loan facility issued to Siti Networks, a cable TV operator promoted by Subhash Chandra-led Essel Group.

“An application has been filed against the company, under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016, by IndusInd Bank Limited, claiming to be a Financial Creditor, before the Hon'ble National Company Law Tribunal, Mumbai Bench for initiation of Corporate Insolvency Resolution Process against the company, claiming a default of ₹83.08 crore,” Zee Entertainment said in a filing to the BSE post market hour on Friday.

Zee further stated that it is party to the Debt Service Reserve Account Guarantee Agreement (DSRA Guarantee Agreement) signed with lnduslnd Bank for the term loan facility advanced to Siti Networks.

“The issue of the company's alleged default under the DSRA Guarantee Agreement, is sub-judice before the Hon'ble Delhi High Court in Suit No. (CS (Comm) 500/2020) filed by the company against lnduslnd Bank,” it added.

Zee claimed that the case is sub-judice before the Delhi High Court and the filing of the corporate insolvency resolution process (CIRP) application against the company is in breach of an order passed in the company's appeal on December 3, 2021. The company will take appropriate legal steps in this regard, it added.

“Filing of the said CIRP application is in breach of the order dated February 25, 2021 as modified by the order of December 3, 2021 passed in the Company's Appeal No. (FAO(OS)(Comm) 15/2021) in the said suit. The company will therefore be adopting appropriate legal steps in that regard,” Zee Entertainment said in the filing.

Ahead of the announcement, shares of Zee Entertainment ended 3.2% lower at ₹278.30 apiece on the BSE.