Zee reaches settlement with IPRS, insolvency plea to be called off

Zee Entertainment Enterprises Ltd said it has entered into a settlement agreement with the Indian Performing Right Society (IPRS) and the insolvency petition filed against it will be called off.

IPRS - the representative body of music owners and composers that collects royalty on behalf of artistes - had in January filed an insolvency plea against Zee before the National Company Law Tribunal (NCLT) for alleged non-payment of dues of around Rs 211 crore.

Zee, in a regulatory filing, said the company and IPRS have "mutually entered into the settlement agreement today on such agreed terms by which all disputes and claims have been settled".

"Accordingly IPRS has agreed to withdraw the aforesaid insolvency petition filed by them," it added.

The details of the settlement agreement was not shared in the regulatory filing.

Earlier, while filing the insolvency plea, the artistes' body had alleged that Zee had defaulted towards royalty payable for utilisation of “literary and musical works". In its response before the exchanges, the media company had denied the charge, saying that IPRS' claim was not in line with the interpretation of the law on the point of payment of royalties for literary and musical works.

The settlement with IPRS comes at a time when Zee is locked in a legal battle with IndusInd Bank, which filed an insolvency petition with the NCLT against the company. Zee was the guarantor for IndusInd Bank's Rs 150-crore loan to Essel Group's Siti Networks. However, it allegedly failed to honour the Debt Service Reserve Account Guarantee Agreement, and the shortfall is reported to be Rs 83 crore.

While the NCLT had admitted the insolvency proceedings on the bank's plea on February 22, the National Company Law Appellate Tribunal (NCLAT) stayed the order last week. It will hear the case again on March 29.

The shares of Zee settled at Rs 195.35 apiece at the BSE on March 6, which was 4.6 percent lower as against the closing price of the last trading session.