MUMBAI: The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday directed Zee Entertainment Enterprises Limited (Zee) to convene a shareholders’ meet on October 14 for approving the merger with Culver Max Entertainment (Sony Pictures Networks India).
The order, passed on August 24, but uploaded to the bourses on Wednesday, comes close on the heels of the Competition Commission of India (CCI)’s observation that the $10-billion merger could hurt competition and that greater scrutiny of the deal was needed, Business Standard reports.
“This Tribunal hereby directs that a meeting of the Equity Shareholders of the Applicant Company be convened and held on Friday, 14th October, 2022 at 4 pm for the purpose of considering, and if thought fit, approving the proposed Scheme, through video conferencing and/ or other audio visual means, without holding a general meeting requiring the physical presence of shareholders at a common venue, as the same in the current Covid-19 environment mandating social distancing norms shall not be feasible,” the NCLT statement reads.
Zee released its own statment: “The National Company Law Tribunal (NCLT)’s Mumbai bench has directed in its order, that a meeting of the equity shareholders of Zee Entertainment Enterprises Ltd. be convened and held on Friday, 14th October, 2022 for the purpose of considering, and if thought fit, approving the proposed merger of the company with Culver Max Entertainment Private Limited (formerly Sony Pictures Networks India Private Limited).”
The proposed merger received approval from the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in July.
Under the terms of the definitive agreements, SPNI, which is an indirect subsidiary of Sony Pictures Entertainment (SPE), will have a cash balance of $1.5 billion (assuming an INR: USD exchange rate of 75:1) at closing, including through infusion by the current shareholders of SPNI and the promoters (founders) of ZEEL, to enable the combined company to “drive sharper content creation across platforms, strengthen its footprint in the rapidly evolving digital ecosystem, bid for media rights in the fast-growing sports landscape and pursue other growth opportunities”.
Under the transactions contemplated by a non-compete agreement, SPE, through a subsidiary, will pay a non-compete fee to certain promoters (founders) of Zee, which will be used by such promoters (founders) to infuse primary equity capital into SPNI, entitling the promoters (founders) of Zee to acquire shares of SPNI, which would eventually equal approximately 2.11% of the shares of the combined company on a post-closing basis.
The merged company would retain Zee’s stock market listing, though Sony would control a majority shareholding of close to 51 per cent.
Zee chief executive Punit Goenka would lead the combined company as MD and CEO. The majority of the board of directors would be nominated by the Sony Group and would include SPNI’s current MD and CEO N P Singh.
