Zee Entertainment Enterprises and IndusInd Bank informed the National Company Law Appellate Tribunal (NCLAT) that a settlement was reached on March 29.

Under the settlement agreement, payment obligations have been assumed and will be paid on June 30 or within seven days of Sony’s merger. Certain payments have already been made under the agreement, lawyers told NCLAT.

The stock was quoted at Rs 217 on the NSE at 1:15 pm, up 4%. About 1 crore shares traded above the 20-day average.

That means the Sony scheme can be considered without litigation affecting the scheme. IndusInd will now withdraw its objection to Zee’s planned merger with Sony. The agreement also contains provisions regarding the consequences of termination. The tribunal listed the case on July 3.

NCLT Mumbai admitted insolvency proceedings against ZEEL in a plea filed by IndusInd Bank on February 22. Zee, the guarantor of IndusInd Bank’s Rs 150 crore loan to Essel Group’s Siti Networks, has failed to honour the Debt Servicing Reserve Account Guarantee Agreement (DSRA). The shortfall amounts to Rs 83 crore.

Proceedings were commenced as Zee was the guarantor of a loan entered into with IndusInd Bank Limited under the Debt Servicing Reserve Account Security Agreement (DSRA Security Agreement) for a term loan facility prepaid to Siti Networks Limited.

Punit Goenka, Zee Entertainment Limited, appealed against this order in NCLAT. In February, NCLAT stayed an order opening bankruptcy proceedings against media and entertainment companies.

The appellate tribunal notified IndusInd Bank that the case would be heard again on March 29.

In January, Axis Finance, a subsidiary of Axis Bank, threatened legal action against Zee Entertainment’s Subhash Chandra and Punit Goenka, including against the merger of Zee and Sony Pictures Network India (SPNI).

In a September 2022 order, the Delhi High Court clarified that IndusInd Bank could initiate insolvency proceedings against ZEEL in the bankruptcy court, despite ongoing proceedings in the high court between the two banks.