Download Unicorn Signals App

Powered By EquityPandit
 Signals, Powered By  EquityPandit

Zee Entertainment Share Rises 14% in 4-Days in Hopes of Merger with Sony and Settlement with Lenders

ZEEL shares tanked after Sony Pictures sent a termination notice for their $10 billion merger.

Zee Entertainment Enterprises (ZEE), a TV broadcasting and software production company in India, has been involved in an ongoing dispute with IndusInd Bank. The bank had approached the bankruptcy code to initiate insolvency proceedings against ZEE in February. Still, the National Company Law Appellate Tribunal (NCLAT) provided interim relief by staying on the proceedings.

On March 16, media reports suggested that ZEE had agreed to pay dues to IndusInd Bank and that the lender had likely agreed to withdraw the insolvency case. The news caused ZEE’s stock to rise 4% to Rs 214.70 on the BSE. However, ZEE clarified that the news report was speculative and the company was still considering various options to resolve the dispute.

ZEE has been working to settle pending issues quickly as it seeks to complete a merger with a Sony Group unit to create a $10 billion media giant. The merger has been approved by shareholders, stock exchanges, and the Competition Commission of India (CCI).

Earlier this month, ZEE settled all disputes/claims with the Indian Performing Right Society (IPRS), and IPRS agreed to withdraw the insolvency petition. The settlement will not have a material impact on ZEE’s financial position. This settlement demonstrated ZEE’s intent to resolve pending issues quickly, furthering the company’s goal of completing the merger with Sony.

ZEE5, the company’s streaming platform, is positioned to benefit from a likely easing competition from global over-the-top (OTT) services. Content costs will likely be cut in the coming year, and the platform has made significant investments in high-quality content and partnerships with prominent makers. Although ZEE5 has experienced high losses, analysts at Nuvama Wealth Management expect losses to start tapering in FY24. There are expectations of a revival in ad spending and subscriptions due to easing margin pressure for fast-moving consumer goods (FMCG).

Get Daily Prediction & Stocks Tips On Your Mobile