Zee Entertainment Enterprises Ltd (ZEEL) has entered into a one-off settlement agreement with Standard Chartered Bank over a loan taken by Essel Group’s Siti Networks.
Standard Chartered has approved certain lines of credit to Siti Networks, which are, among other things, backed and secured by ZEEL’s DSRA (Debt Servicing Reserve Account).
“Since the borrower defaulted on the bank’s debt repayment obligations, to amicably resolve the issues between the parties, the company has entered into a one-time settlement agreement with the bank about the DSRA claim/commitment,” ZEEL said in a regulatory filing on Thursday.
Although the company is in the process of merging with rival Culver Max Entertainment Pvt Ltd (formerly Sony Pictures Networks India), the merger amount was not mentioned.
Siti Networks, formerly Wire and Wireless Ltd, is a multiple-system operator driven by the Essel Group led by media mogul Subhash Chandra.
Earlier this week, ZEEL announced the settlement of its disputes and claims with IndusInd Bank.
The matter relates to payment defaults by Siti Networks, the multi-system operator subsidiary of the Essel Group. ZEEL is the guarantor for the Siti Networks loan.
Last February, IndusInd Bank pleaded with NCLT’s Mumbai judges to initiate insolvency proceedings against ZEEL, claiming that the media and entertainment company was in arrears of Rs 83.08 crore.
NCLT admitted the request and directed that bankruptcy proceedings be commenced by appointing an interim resolution professional for ZEEL.
Later, Puneet Goenka, MD and CEO of ZEEL, challenged NCLT’s order at the appeal court NCLAT.
The National Company Law Appellate Tribunal (NCLAT) stopped the proceedings on February 24. On March 29, NCLAT was informed of the settlement.
In its March 29 order, NCLAT stated: “Under the Settlement Agreement, certain payments/obligations have been incurred which shall be due on June 30, 2023, or within 7 days of the approval of the Plan, whichever is earlier.”
“It is further submitted that the parties also agree that, in light of the settlement, the scheme pending at NCLT Mumbai should be considered on its own merits and that this appeal shall not prejudice the decision that the scheme and the Respondent (IndusInd Bank) Respondent shall withdraw the Planned objection,” NCLAT records.
It added that the agreement between the parties also contained a termination consequence.
It was a major respite for ZEEL, which merged with Culver Max Entertainment and created India’s largest media empire. It has received approval from key stakeholders and regulators, including the fair trade regulator CCI.