Zee Entertainment Enterprises Ltd. has decided to withdraw its application asking the NCLT to order Sony to honour its obligation to close the $10-billion merger deal between itself and Sony. It had filed the merger implementation application with the Bombay bench of the National Company Law Tribunal on January 24 after Sony called off the deal for alleged breaches of the terms of agreement.
On April 16, Zee said, it had decided to withdraw the merger implementation application after consultations with legal experts. However, it clarified that it would continue to pursue its claim including the demand for a $90-million termination fee against Sony in the ongoing arbitration proceedings in Singapore.
It is believed that Zee had spent a total of around Rs. 367 crore on merger-related expenses in the two years the merger agreement was subsisting. After the cancellation of the deal by Sony, Zee initiated steps to streamline its structure and rationalise its workforce in a cost-cutting exercise. It announced recently that managing director Punit Goenka would take a 20% cut in his remuneration as part of the exercise to reduce expenses and improve profitability.