On Thursday, Siti Networks, a subsidiary of the Essel Group, said that Zee Entertainment Enterprises Ltd. (ZEEL) had reached a one-time payment arrangement with Standard Chartered Bank for the debt it had received.
The DSRA (Debt Service Reserve Account) assistance and guarantee from ZEEL served as one of the security measures for the credit facilities the bank had approved for Siti Networks.
The company explained in a regulatory filing that it had reached a one-time settlement agreement with the bank regarding the DSRA claims and undertaking “in the interest of amicably due to the fact that the borrower had neglected to fulfill its commitments to the bank with regard to debt payments.
The cost hasn’t been disclosed by ZEEL, which is merging with rival company Max Entertainment Pvt. Ltd., formerly known as Sony Pictures Networks India.
The Essel Group, founded by media mogul Subhash Chandra, is promoting Siti Networks, formerly known as Wire and Wireless Ltd. Siti Networks is a multisystem operator.
The disagreement between ZEEL and IndusInd Bank has been resolved, the company stated earlier this week.
It had to do with Siti Networks, a multisystem operator division of the Essel Group, not paying its bills on time. Loans made by Siti Networks were guaranteed by ZEEL.
IndusInd Bank requested that ZEEL be put into bankruptcy in February of last year, stating that the media and entertainment company had defaulted on payments totaling Rs 83.08 crore. The Bombay bench of the NCLT heard the request.
The NCLT accepted the plea and instructed ZEEL to start the insolvency process by choosing an interim resolution specialist.
Puneet Goenka, the managing director and chief executive of ZEEL, then filed a petition with the appellate panel NCLAT to contest the NCLT’s ruling.
The proceedings were suspended on February 24 by the National Company Law Appellate Tribunal (NCLNCLAT).
The settlement was communicated to NCLAT by both parties on March 29.
It is stated in the settlement agreement that “certain payments and obligations have been undertaken that shall be cleared up to June 30, 2023, or within seven days following the authorization of the plan, whichever is earlier,” according to the NCLAT’s ruling, as reported by PTI.
“It is further submitted that parties have also agreed that, in light of the settlement, the scheme, which is currently under consideration in NCLT, shall be considered on its own merits without this appeal being any obstacle in deciding the scheme, and the respondent (Indusind Bank) and the respondent shall withdraw the objection filed to the scheme,” NCLAT noted.
It was added that a group of termination effects is included in the parties’ agreement.
With the merger of ZEEL and Culver Max Entertainment, India’s largest media empire would be created, which is a significant break for ZEEL. Major stakeholders and regulators have already given it their blessing, notably the fair trade authority CCI.