New Delhi:

Zee Entertainment Enterprises has sought a termination fee of USD 90 million (around Rs 748.7 crore) from the Sony Group for calling off the USD 10 billion merger deal in January this year.

It has sought termination fees from two Sony Group entities — Sony Pictures Networks India (SPNI), now known as Culver Max Entertainment, and Bangla Entertainment (BEPL), according to a regulatory filing from Zee Entertainment Enterprises Ltd (ZEEL) on Thursday.

ZEEL has, on account of Culver Max’s and BEPL’s breaches under the Merger Cooperation agreement (MCA), terminated the MCA by issuing a letter dated May 23, 2024.

The company has sought a termination fee from Culver Max and BEPL under the provisions of the MCA, it said.

“Culver Max and BEPL have failed to comply with their obligations under the MCA. Therefore, the company has terminated the MCA and called upon Culver Max and BEPL to pay the termination fee i.e. the aggregate amount equal to USD 90 million in accordance with the MCA,” it said.

Earlier on January 22, 2024, Sony Group Corporation (SGC) had said that ZEEL did not satisfy the merger conditions and initiated arbitration proceedings before the Singapore International Arbitration Centre (SIAC) claiming USD 90 million as termination fee.

This was contested by ZEEL before the SIAC, which denied any interim relief to the Sony group against the Indian broadcaster.

ZEEL had moved the National Company Law Tribunal seeking implementation of the proposed merger and later withdrew its plea.

“We hereby wish to inform you that the company has, on account of Culver Max’s and BEPL’s breaches under the MCA, terminated the MCA by issuing a letter dated May 23, 2024, and sought a termination fee from Culver Max and BEPL in accordance with the provisions of the MCA,” the filing said.

ZEEL and SPNI had entered into an agreement to merge on December 22, 2021.

On August 10, 2023 the Mumbai bench of NCLT approved the scheme of merger of ZEEL with Sony group entities Culver Max Entertainment and BEPL, which could have created a USD 10 billion media entity.

However, two years after that Sony Corporation announced the termination of the agreement on January 22, 2024.
 

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Zee Entertainment and SONY logos are displayed in this illustration taken, September 1, 2022.
| Photo Credit: Reuters

The National Company Law Tribunal (NCLT) on Tuesday accepted a petition by a Zee Entertainment shareholder seeking the merger of its Indian entity with Sony, which was called off last week despite regulatory approvals.

The Mumbai-bench of NCLT issued a notice on a petition moved by Mad Men Film Ventures, a shareholder of Zee Entertainment Enterprises (ZEEL), directing Sony Pictures Network India, now known as Culver Max, to file a reply within three weeks.

Mad Men Film Ventures on Tuesday filed the petition requesting both ZEEL and Sony to implement the merger as it was approved by the NCLT in August 2023.

The tribunal did not agree with the arguments made by the counsel stating that the approval by NCLT was conditional and depended on various conditions, which may be fulfilled or waived in writing.

NCLT has set March 12 for the next hearing on the matter.

Last week, the Sony Group Corp called off the merger with ZEEL following a stalemate over who will lead the merged entity. This merger could have otherwise created a $10 billion media enterprise in the country.

The deal stipulated that the merger was to be completed before December 21, 2023, including regulatory and other approvals with a grace period of one month to complete the transaction.