Not agreed to deadline extension; yet to hear proposal from Zee: Sony India

Sony Pictures Network India (SPNI), the Indian subsidiary of Sony Group Corp, on Tuesday said that the company has not agreed to ZEE Entertainment Enterprises Ltd (ZEEL) proposal for the extension of the deadline. The company’s statement comes a day after ZEE sought more time for the proposed merger with Sony Pictures Network India, now known as Culver Max Entertainment Private Limited.

"ZEE's notice to the Bombay Stock Exchange and the National Stock Exchange of India dated December 17 is an acknowledgement that they will not be able to meet the December 21, 2023 deadline to close the SPNI/ZEE merger. The notice triggers an existing contractual provision in the deal that allows for both parties to discuss the possibility of extending the deadline. SPNI is required to start those conversations but has not yet agreed to a deadline extension. We look forward to hearing ZEE’s proposals and how they plan to complete the remaining critical closing conditions," Sony India says in a statement.

The proposed merger is touted to create a media and entertainment conglomerate worth $10 billion. ZEE and Sony entered into the merger cooperation agreement on December 22, 2021. The deadline for the completion of the merger was initially set for January 2023. However, the cut-off date for the execution of the ZEE-Sony merger was later extended to December 22, 2023, two years after the pact was inked between the two companies. In its annual report released last month, ZEEL CEO Punit Goenka said the merger proposal between Zee and Culver has received all necessary approvals. "The Company will continue to take the next steps in accordance with the law.” In August 2023, the National Company Law Tribunal (NCLT) approved the proposed merger of ZEE with Sony.

However, since the merger announcement, ZEE has been embroiled in several legal as well as regulatory issues, thus causing delays to the proposed merger.

The Securities Appellate Tribunal (SAT) in October 2023 barred Goenka from holding key managerial positions in the company and other associated firms. The regulatory body directed Goenka to cooperate with the SEBI investigation being carried out. 

Goenka had earlier challenged the SEBI order, which barred its promoters Subash Chandra and him from taking managerial roles in any of the Zee group companies.

Meanwhile, last week, ZEE’s non-independent director Adesh Kumar Gupta exited the company ahead of the company’s annual general meeting (AGM). In September 2023, IDBI Bank and Axis Finance, too, filed appeals before the NCLAT (National Company Law Appellate Tribunal), Delhi, challenging the NCLT approval for the merger.

Triggered by the development, shares of ZEE Entertainment Enterprises Ltd plunged as much as 4.7% to hit an intraday low of ₹267.25 apiece on the BSE. The scrip opened lower at ₹277, as against the previous closing price of ₹280.55. At 11:45 pm, the share price of the company was trading 3.08% lower at ₹271.90. This is in contrast to the broader BSE Sensex which was trading 37.91 points or 0.05% higher at 71,353. The company hit a 52-week high of ₹299.50 on December 12 this year and a 52-week low of ₹172.25 on June 20 this year.