Zee Sony merger news: In active engagement with Sony to ensure the merger agreement is finally implemented, Zee says

Punit Goenka, MD & CEO of Zee Entertainment Enterprises Ltd (ZEEL), on Thursday said the company is in active engagement with Japan’s Sony Group Corporation to ensure that the merger with its Indian media unit, Culver Max Entertainment, also known as Sony Pictures Networks India (SPNI), is finally implemented after receiving all the approvals.

Goenka also asserted that ZEEL is committed to ensuring that all the issues in the merger agreement with SPNI are addressed, even as differences have cropped up between the two parties about the CEO’s role in the proposed combined entity.

“We are committed towards ensuring that all points in the composite scheme of arrangement are duly addressed,” Goenka told analysts during the company’s Q2 earnings call, adding that the merger holds immense value for all the shareholders.

“We recognise the value that this merger holds, and our focus remains on unlocking the opportunities for all the shareholders,” he added.

The cut-off date for completing the merger is December 20. In June, Goenka had stated that the merger would go through with or without him.

One of the key elements of the merger agreement is Goenka’s appointment to the role of MD & CEO of the combined business. This has, however, led to disagreements between the two parties.Even though Goenka has been granted a reprieve by the Securities Appellate Tribunal (SAT), Sony is worried about the regulatory ramifications of his continuing to be under investigation by the Securities and Exchange Board of India (Sebi), which is expected to complete its probe against ZEEL promoters in eight months.Sony is said to have requested that Goenka make way for its India MD and CEO, N.P. Singh, to ensure that the merger and the subsequent integration between the two companies happen smoothly. However, Goenka has contended that the SAT verdict has cleared the path for him to take over as the chief of the soon-to-form Sony-Zee entity.

The Sony-Zee merger has received the approval of the stock exchanges, the Competition Commission of India, and the National Company Law Tribunal.

Meanwhile, ZEEL has recorded a 9% year-on-year growth in net profit at Rs 123 crore for the quarter ended September. Earnings before interest, tax, depreciation, and amortization (EBITDA) expanded by 6% to Rs. 333 crore in the quarter.

Revenue jumped 21% to Rs 2,438 crore on the back of strong performances by the film and digital divisions. During the quarter, ZEEL-owned Zee Studios released six films, including Gadar-2, which was one of the highest-grossing Hindi films during the quarter.

Advertising revenue during the quarter fell 3% to Rs 979 crore due to a subdued ad market, while subscription revenue rose 8% to Rs 888 crore on the back of increases in TV channel prices and growth in the ZEE5 subscription business.

Total revenue of ZEE5, ZEEL’s streaming platform, surged by 59% to Rs 265 crore, while operating loss narrowed by 8.3% to Rs 254 crore.

Solidad La Madrid

Solidad has been a reporter since 2017. She writes stories about climate change, environment, COVID-19 pandemic and human rights.

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