Zee's Operational Creditor Withdraws Insolvency Petition After Settlement

There is no penalty paid and no material impact on the financial position of the company, Zee informed the exchanges.

<div class="paragraphs"><p>Zee Entertainment channels. (Source: BQ Prime)</p></div>
Zee Entertainment channels. (Source: BQ Prime)

Zee Entertainment Enterprises Ltd. told exchanges on Monday that it has entered into a settlement agreement with operational creditor Indian Performing Right Society Ltd.

The deal entails settlement of all disputes and claims between the media company and its creditor, Zee said in an exchange filing. Accordingly, IPRS has agreed to withdraw the insolvency petition filed by them, the company said.

"There is no penalty paid and no material impact on the financial position of the company," Zee said.

Zee did not share the settlement terms in its statement.

Zee Entertainment Gets Interim Relief As NCLAT Stays Insolvency Order

In January, IPRS had approached the Mumbai bench of the National Company Law Tribunal for initiation of insolvency proceedings against Zee, over debt and default of Rs 211.42 crore towards royalty payable for utilisation of "literary and musical works".

According to Zee, there was an ongoing dispute between the parties on the claimed amount. The claim was not in consonance with the interpretation of the law, on the point of payment of royalties for literary and musical works by the Delhi High Court, it said. Hence, the claimed amount was not payable to IPRS, Zee said.

On Feb. 24, the principal bench of the NCLAT had stayed the Feb. 22 order by NCLT to initiate insolvency proceedings against Zee, on a plea by IndusInd Bank Ltd. Zee was the guarantor for the lenders to Essel Group's Siti Networks. The NCLAT will hear the matter next on March 29.

The Zee stock closed 2.3% lower at Rs 195.35 apiece on Monday, as compared with a 0.69% gain in the benchmark Sensex.

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