Zee Entertainment, a well-known television and OTT company, recently failed to complete a deal with Disney Star, which costs around USD 1.4 billion. Also, Zee Entertainment Enterprises Ltd. (ZEEL) failed to fulfil its first instalment of around USD 200 million, which is creating an alarming situation in the market.
According to the sources, the instalment of $200 million was to be paid after the merger of Sony Group with Zee Entertainment Enterprises. Later, Sony Group withdrew the offer of USD 1.5 billion, which caused Zee to fail to pay the instalment.
According to the agreement between Zee Entertainment Enterprises and Sony, Sony was supposed to invest around USD 1.6 billion. After the failure of the merger, the Zee company has not made any official comment for now.
The Zee and Sony merger deal affected Zee and Sony stock on their respective stock exchanges. I.e., Zee is down more than 35% from its average trading price, whereas Sony is not that affected; Sony only took around 3% of the downfall.
The current market capitalization of Zee Entertainment Enterprises is INR 15,000 crore, which was more than INR 23,000 crore last week.
The Sony Group and Zeel moved to the Singapore International Arbitration Centre for the resolution, where Zeel is asking the court to force the Sony Group to merge, and Sony Group is asking Zeel for compensation of $90 million.
Currently, the CEO of ZEEL is Subhash Chandra’s son, Punit Goenka, and he has been investigated by Sebi for some fraud cases. Sony asked him to stay away from the company after the merger, and Subhash Chandra wanted his son to be CEO even after the merger, which caused the merger to fail.