Zee Entertainment Enterprises has agreed to repay dues owed to IndusInd Bank as the company seeks to resolve insolvency proceedings initiated against it, Bloomberg reported.
The move will help Zee to move forward on its merger with Sony Group unit to create a $10 billion media giant.
The settling of dues of about 837 million rupees ($10 million) to the lender could happen as early as Friday, Bloomberg said citing people familiar with details.
The report added that the Mumbai-based bank has agreed to withdraw its insolvency proceedings against the media company once the repayment is made.
Share prices of ZEE were trading nearly 6.8% up reacting to the news.
Shares of IndusInd Bank fell nearly 3% after 7.35 lakh shares (0.13% Eq) worth Rs 74.37 cr changed hands at average of Rs 1,011/share.
Mumbai NCLT had admitted insolvency proceedings against ZEEL in a plea filed by IndusInd Bank in February.
Zee was the guarantor for IndusInd Bank's Rs 150-crore loan to Essel Group's Siti Networks, however, it failed to honour the Debt Service Reserve Account Guarantee Agreement (DSRA). The shortfall amounted to Rs 83 crore.
The NCLAT, after staying the order issued notice to IndusInd Bank on the plea by Zee managing director Punit Goenka, It said it will hear the case again on March 29.
Zee also said in the NCLAT that in the NCLT hearing, it was not allowed a hearing to defend its position; hence, it appealed to set aside the order on initiation of insolvency.
A lawyer representing ZEE told NCLAT that all necessary approvals regarding the merger with Sony unit have been received and the insolvency proceedings could stall the deal.
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