Zee shares rise after NCLAT stays NCLT’s order to initiate insolvency proceedings

By India Today Business DeskShares of Zee Entertainment Enterprises gained on Friday after falling nearly 4 per cent in early trade.

Zee Entertainment’s share price rose over 3 per cent after the National Company Law Appellate Tribunal (NCLAT) stayed a corporate insolvency resolution order (CIRP) order passed by National Company Law Tribunal (NCLT) on Thursday, on the basis of a petition filed by IndusInd Bank.

This comes as a relief for the entertainment and media behemoth, just a day after its stock fell nearly 10 per cent during intraday trade after the order to initiate insolvency proceedings. At around 1:45 pm, shares of the company were up 1.28 per cent.

Commenting on the NCLAT’s order, the company’s CEO Punit Goenka said, “We respect the decision taken by the Hon’ble National Company Law Appellate Tribunal (NCLAT) and remain committed towards protecting the interests of all stakeholders. Our focus continues to be on the timely completion of the proposed merger,” stated Punit Goenka after the order.”

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Soon after the NCLT’s order, a statement issued by the Office of Punit Goenka challenged insolvency proceedings initiated against Zee. The statement also highlighted that the company expects timely completion of a merger with the local unit of Japan’s Sony Group.

It may be noted that Zee was the guarantor for IndusInd Bank’s Rs 150 crore loan to Essel Group’s Siti Networks. However, it failed to repay the full amount, falling short by Rs 83 crore. This prompted IndusInd Bank to file an appeal against Zee for a resolution. The lender had sought CIRP under the Insolvency and Bankruptcy Code against Zee.

As the situation stands, the NCLAT has issued a notice to IndusInd Bank on the plea filed by Punit Goenka. The next hearing in the case will be on March 27.