IndusInd Bank moves NCLT to initiate insolvency proceedings against Zee Entertainment

New Delhi, Feb 5:Private sector lender IndusInd Bank has filed a plea before NCLT to initiate insolvency proceedings against Zee Entertainment Enterprises Ltd (ZEEL).
IndusInd Bank, in its plea before the Mumbai bench of National Company Law Tribunal (NCLT) has claimed a default of Rs 83.08 crore against the media and entertainment firm, ZEEL said in a late evening regulatory updates on Friday.
“An application has been filed… By IndusInd Bank Ltd, claiming to be a Financial Creditor, before the NCLT, Mumbai for initiation of Corporate Insolvency Resolution Process (CIRP) against the company, claiming a default of Rs 83.08 crore,” it said.
The application has been filed under Section 7 of the Insolvency & Bankruptcy Code (IBC), said ZEEL.
Under Section 7 of IBC, a financial creditor may move NCLT for initiation of CIRP over default of Rs 1 crore and above.
While sharing the details, ZEEL said it is party to the Debt Service Reserve Account Guarantee Agreement (DSRA Guarantee Agreement) entered into with IndusInd Bank for the term-loan facility advanced to another Essel Group firm, Siti Networks Ltd.
Siti Networks, formerly known as Wire and Wireless Ltd, is a multi-system operator promoted by media baron Subhash Chandra-led Essel Group.
According to ZEEL, “the issue of the company’s alleged default under the DSRA Guarantee Agreement, is sub-judice before the Delhi High Court in a suit filed by the company against IndusInd Bank.
“Filing of the said CIRP Application is in breach of the order dated 25th February 2021 as modified by the order of December 3, 2021 passed in the said suit,” it said adding the company will therefore be adopting appropriate legal steps in that regard.
On December 22 last year, ZEEL announced its merger with Sony Pictures Networks India Pvt Ltd (SPNI) after signing definitive agreements.
As per the deal, Sony would invest USD 1.575 billion and hold 52.93 per cent stake in the merged entity and Zee will have the remaining 47.07 per cent. (PTI)