Zee Entertainment Enterprises Ltd. has commenced negotiations with its creditors to settle debts and remove the final barrier to concluding a merger with the Sony Group that would form a $10 billion media conglomerate.
According to the people familiar with the matter, who asked to remain anonymous since the information is private, the Indian television network has proposed that it will return a loan to IDBI Bank Ltd of around 1.49 billion rupees ($18.1 million) in instalments. IDBI bank is one of the creditors who filed a petition with the insolvency court. According to reports, the founders of Zee are negotiating separately with Axis Bank Ltd. and the asset reconstruction division of JC Flowers & Co. to settle debts totalling 400 million rupees due to companies they own.
The payments are crucial for the merger since it will result in a media company with the largest audience and the strongest negotiating leverage in the nation of more than 1.4 billion people. Post finalization of the transaction, Zee’s founders will take charge of 3.99% of the shares, Sony Pictures Networks India Pvt. would hold slightly more than half, and public shareholders will hold the shares that are left.
Creditors of the company and its founders had been requesting payments in bankruptcy court. According to a filing by Zee, IndusInd Bank Ltd. will no longer protest to the merger because its loans were paid off last month.
Axis Bank’s spokesperson declined to comment. Meanwhile, JC Flowers and IDBI Bank’s representatives did not respond to emails and phone calls that were looking forward to comments on the matter. The Atlanta-based Invesco Developing Markets Fund, which held 18% of Zee at the time of the merger announcement, sold all of its shares in the company as of last week, according to exchange papers. This fund had the highest interest in Zed at that time. India’s antitrust watchdog approved the sixteen-month-old merger agreement in October.
