Sony Pictures Networks India Managing Director and Chief Executive Officer NP Singh has reassured employees that the senior management is committed to the long-term, strong future of the company. The development comes close on the heels of the Zee deal fallout.
"Our journey towards the merger has been remarkable, showing us how resilient and dedicated we can be when working towards a common goal," Singh wrote in a communique, accessed by Moneycontrol.
Also Read: Zee-Sony legal war over failed deal hinges on $90-mn termination fees
"As we transition from this phase, I am, along with the senior management team, committed to setting the company up for a long-term, strong future. We will actively explore new organic and inorganic possibilities to strengthen our market presence," he said.
On January 22, Sony called off the $10-billion deal with Zee Entertainment Enterprises, citing delays and lapses in meeting closing conditions of the agreement. The firm is also seeking a termination fee of $90 million on account of alleged breaches of the Merger Co-operation Agreement (MCA).
"Our immediate focus will be back on unleashing our full potential, continuing to craft content that not only engages our audience but also boosts subscriber growth and revenues, thereby nurturing a culture rooted in excellence, pivotal for our ongoing growth and success," Singh wrote.
Also Read: CLSA downgrades Zee to 'sell' as Sony calls off merger; expects valuation to slump
"The M&E world is constantly changing, and our journey is not just about adapting to change; it's about leading it. I express my deepest gratitude to each of you for your unwavering commitment and resilience," he concluded.
Impact of deal fallout on Zee
If the merger had fructified, it would have brought 75 channels, two video-streaming services and two film studios under a single entity. The deal announcement done back in 2021 also helped in re-rating the Zee Enterprises stock, as investors put behind corporate governance issues.
But, once the deal was called off on January 22, 2024, the stock fell over 30 percent in a single day. Global brokerage firm CLSA downgraded the stock to a 'sell' call and slashed its price target to Rs 198.
The cancellation of the much anticipated merger has also brought back concerns over Zee's corporate governance back into the limelight, CLSA said, more so since the unprecedented promoter share pledging crisis of 2019 wherein the company's promoters (the Essel Group) repaid loans with multiple stake sales to investors.
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