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Zee Media Corporation Limited announced today that its Board of Directors has approved a major fundraising initiative through the issuance of Foreign Currency Convertible Bonds (FCCBs) worth up to USD 465.9 million (Rs 399.78 crore). The bonds will be issued on a private placement basis to UNICO Global Opportunities Fund Ltd. and Sun India Opportunities Investing Fund.

This strategic move aims to bolster Zee Media's financial flexibility and is aligned with the External Commercial Borrowing (ECB) guidelines issued by the Reserve Bank of India.

The decision was made during a board meeting held earlier today and disclosed to the National Stock Exchange (NSE) and BSE Limited. The bonds will carry a 5% annual coupon rate, remain unsecured and unlisted, and have a 10-year maturity. They will be issued on a private placement basis to two international investors — UNICO Global Opportunities Fund Limited and Sun India Opportunities Investing Fund (a VCC sub-fund).

The FCCBs will be issued in five series, and the funds will be drawn in tranches. The company has fixed the conversion price at ₹13.50 per equity share (including ₹12.50 as equity premium), based on the pricing formula under the 1993 FCCB Scheme. The "floor price" for the issuance has been set at ₹13.04 per equity share, with the relevant date for pricing determined as April 8, 2025.

Should the bonds be converted, Zee Media could potentially issue up to 2,961,353,58 new equity shares of ₹1 each. The FCCBs will not be listed on any stock exchange, domestic or international. The company has not reported any default history on coupon payments for prior FCCB issuances.

Zee Media approves 10-Year, 5% FCCB issue worth USD 465.9 Million

The National Company Law Appellate Tribunal (NCLAT)has dismissed IDBI Bank's plea seeking insolvency proceedings against Zee Entertainment.  The NCLAT upheld the earlier order by the National Company Law Tribunal (NCLT), which rejected IDBI's plea against the media company.

In an official communication addressed to the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE), ZEEL confirmed that the appellate tribunal upheld the NCLT's order.

The development follows ZEEL's earlier disclosure on August 1, 2023, in compliance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. In that filing, the company had informed stakeholders of the ongoing legal proceedings initiated by IDBI Bank.

“We are pleased to inform that the NCLAT has upheld the order passed by NCLT, thereby dismissing the appeal by IDBI Bank,” the statement from ZEEL read.

The appellate tribunal has also granted IDBI Bank the liberty to file a fresh plea against Zee Entertainment for defaults beyond the Covid moratorium period. IDBI Bank had sought insolvency proceedings against Zee Entertainment Enterprises Limited (ZEEL) to recover dues of ₹149.60 crore.

IDBI Bank, in its petition, claimed that Zee agreed to secure loans extended to Siti Networks through a Debt Service Reserve Account (DSRA) Guarantee. The lender says Siti Networks had to maintain the DSRA. It alleged that Zee submitted a guarantee and was responsible for any shortfalls in the DSRA. It adds that the media firm was informed about the shortfalls.

Zee opposed the lender’s plea and sought its dismissal. It also opposed the issuance of a notice. Earlier in May 2023, the Mumbai bench of the NCLT had dismissed the bank’s insolvency plea against Zee.

No insolvency for Zee: IDBI’s plea dismissed by Appellate Tribunal

Zee Entertainment Enterprises Ltd. (ZEEL) has received GST notice from the Commercial Tax Officer, Chengalpattu, Tamil Nadu. The order demands INR 0.40 million (including penalty) for ineligible Input Tax Credit (ITC) claims, along with INR 16.56 million in interest for excess ITC availed between July 2017 and March 2018. 

ZEEL believes the case has merit and will appeal within three months under the TNGST Act. The company assured investors that the order will not materially impact its financials or operations. The violation stated reads GST demanded towards excess ITC claimed in GSTR-3B.

ZEEL in its disclosure to stock exchanges stated that they have received a GST Order passed under Section 74, of TNGST/CGST/IGST Act, 2017 determining tax payable under GST of INR 0.40 million (including penalty) on ineligible ITC claimed and interest towards discrepancies arising in excess availment of ITC of INR 16.56 million for the period July 2017 to March 2018.

ZEEL in its filing stated, "The Company believes that there are merits in the case and will take necessary legal recourse under the available law by filing an appeal with three months before the adjudicating authority as per the provisions of TNGST Act. There is no material impact on financial, operations or other activities of the Company."

ZEEL gets GST notice of Rs 16.60 million for ineligible ITC claims

The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) has directed Zee Media Corporation Limited to pay Hinduja Global Solutions Limited 50% of the outstanding amount within one week. The matter is scheduled for further directions on February 4, 2025.

Zee Media approached TDSAT, alleging that the respondent issued a unilateral, arbitrary, and illegal notice on January 3, 2025, stating that the RIO between the parties would expire on January 9 and that all 18 channels of the petitioner would be switched off.

The plea also stated that the respondent had issued a communication on December 12, 2024, which was claimed to be a disconnection notice due to alleged outstanding dues owed by the petitioner. The plea further noted that the RIO-based agreement remained valid until January 31, 2025.

TDSAT member Subodh Kumar Gupta ordered that, as an interim measure, Zee Media, the petitioner, is to pay Hinduja Global Solutions ₹1,69,70,832 of the total outstanding amount of ₹3,39,41,664 by 5:30 PM on January 13, 2025, through demand draft or online payment.

The order also stated, “The respondent should not take any further coercive action against the petitioner until the next hearing date.”

For the remaining 50% of the amount, the petitioner must submit their payment offer to the Tribunal by the next hearing and provide a copy to the respondent. The Tribunal clarified that this payment would not constitute an admission of facts by either the petitioner or the respondent.

The petitioner requested TDSAT to declare the notices dated January 3, 2025, and December 16, 2024, as void ab initio and legally invalid. The petitioner also sought a declaration that the Marketing Service Agreement dated February 9, 2024, is beyond the scope of TRAI Regulations and that any outstanding amount under this agreement cannot justify the disconnection of TV channels governed by the Subscription Agreement under the regulatory framework.

TDSAT directs Zee Media to pay Hinduja Global Solutions Rs 1.69 crore in a week

In its ongoing investigations into Zee Entertainment Enterprises (ZEEL), the Securities and Exchange Board of India (SEBI) has rejected a settlement application filed by the company and its chief executive officer (CEO), Punit Goenka. The regulator has also expanded the scope of the investigation, under which the media firm’s former chairperson, Subhash Chandra, is also under the scanner.

In an adjudication order issued on Thursday, the market regulator pointed out that Zee and Goenka had filed a settlement application for alleged violations of the Listing Obligations and Disclosure Requirements (LODR) Regulations. SEBI had issued a show-cause notice in the matter in July 2022.

“The panel of Whole Time Members of SEBI rejected the settlement applications and also referred the matter to SEBI for further investigation. In this regard, it has been observed that subsequent to the completion of the investigation in the instant matter, it has been decided by the Competent Authority to proceed against the Notices under Section 11B of SEBI Act 1992,” said SEBI in the order.
 
The market regulator has highlighted that the allegations in the July 2022 show-cause notice will be subsumed with the findings of the further investigation carried out by SEBI.

SEBI added that the examination report and all other documents relied upon will be treated as an integral part of the further investigation, and the earlier show-cause notice will be incorporated in further notices to be issued in the matter.

The markets regulator is investigating the alleged fund diversion by Chandra and his son, Punit Goenka. The initial order pertains to a letter of comfort (LoC) granted to the tune of Rs 2,000 crore. However, SEBI had submitted before the Securities Appellate Tribunal (SAT) that more LoCs were under scrutiny, including one to the tune of Rs 4,210 crore issued by Chandra in his capacity as the chairman of Essel Group.

The contents of the Show Cause Notice dated July 06, 2022 issued by the Adjudicating Officer (AO) to ZEEL, Chandra and Goenka will also be incorporated in the new SCN to be issued following further investigations.


ZEE Case: SEBI rejects settlement plea; expands probe on ZEEL, Goenka

The Bankruptcy Court in Mumbai recently dismissed an application filed by Phantom Studios India (PSIPL) that sought to implement the merger scheme between Zee Entertainment Enterprises Limited (ZEEL) and Sony Group companies, Bangla Entertainment Private (BEPL) and Culver Max Entertainment (CMEPL).

PSIPL, formerly known as Mad Man Film Ventures, held approximately 1.3 million shares of Zee Entertainment, valued at around ₹50 crore, at the time of its tribunal filing. Last month, the tribunal officially revoked its approval for the proposed $10 billion merger between ZEEL and Sony's Indian media units, CMEPL and BEPL.

"During the course of the hearing, we were informed that PSIPL attended the shareholder meeting and voted in favor of the scheme. As Section V, Paragraph 10 allows withdrawal by parties, PSIPL cannot insist on the scheme’s implementation," stated the division bench, consisting of Judicial Member Lakshmi Gurung and Technical Member Charanjeet Singh Gulati, in its October 24 order.

The companies also argued that the tribunal lacked the authority to enforce a scheme that had not taken effect and noted that the scheme's approval was conditional.

In August, ZEEL and Sony's Indian units reached a non-cash settlement to resolve all disputes stemming from their failed merger. Both companies agreed to withdraw claims in the ongoing arbitration at the Singapore International Arbitration Centre and related proceedings in the NCLT.

This settlement, focused on independently pursuing future growth, followed Sony’s January termination of the merger, citing ZEEL's unmet closing conditions and leadership disagreements. Sony subsequently filed a $90 million arbitration claim against ZEEL.

Mumbai Court dismisses Phantom Studios’ bid to enforce Zee-Sony merger scheme

The Independent Investigation Committee (IIC), constituted by the Board of Directors of ZEE Entertainment Enterprises Ltd. (ZEE), has cleared the company of allegations raised by market regulator SEBI regarding the alleged siphoning of funds amounting to Rs 2,000 crore. The IIC report was submitted to the company’s Board on Wednesday.

ZEE formed the IIC on February 27, chaired by Justice Dr. Satish Chandra, a former judge of the Honorable High Court of Allahabad. The committee also included ZEE’s two Independent Directors: Mr. Uttam Prakash Agarwal, Chairman of the Audit Committee and former President of the Institute of Chartered Accountants of India, and Dr. P.V. Ramana Murthy, Chairman of the Nomination and Remuneration Committee, a lawyer, author, and academic expert in HR and organizational development with over 30 years of experience across renowned global brands.

Dr. Satish Chandra, Chairman of ZEE’s Independent Investigation Committee and Former Judge of the Allahabad High Court, stated, “We have invested a significant amount of time and energy to conduct a detailed review of all the allegations, and the necessary submissions have been made to the Board. The required records and information were obtained from the Company, its management, and promoters over the last few months, which were duly verified by the Committee, along with a team of experts from the financial domain.”

Chandra further added, “The efforts of Committee members, Dr. Murthy and Mr. Agarwal, along with the external advisors, allowed us to conduct a comprehensive evaluation of all the points. The Committee acknowledges the support provided by the management, which enabled us to complete the review in a timely manner. Based on our report, we have not found anything adverse or improper in the Company’s operations, and a detailed report has been submitted to the Board outlining our findings.”

The committee stated in its report that it reviewed the allegations raised by the regulatory agencies and verified all the documents and information provided by ZEE during the investigations conducted by SEBI. The committee also sought advice from reputable external audit firms (empaneled with regulatory agencies), as well as taxation and regulatory experts, to ensure a comprehensive review of all points.

The committee’s report indicates that ZEE has implemented necessary remedial measures for past issues already reviewed by SEBI. The Committee also noted that the transactions under investigation did not adversely impact the Company or its shareholders. These transactions were found to be part of the normal course of business, and no material irregularities were identified.

The Committee found no need for further corrective or disciplinary measures, policy changes, or legal steps.

Following the submission of its findings, the Board has advised the Company to proactively settle any pending adjudication proceedings with SEBI in a timely manner, in the interest of shareholders and all stakeholders of the Company.

Investigation committee gives clean chit to ZEE, submits report to the board

On Tuesday, Zee Entertainment Enterprises Ltd. informed Securities and Exchange Board of India (SEBI) that they have launched a Foreign Currency Convertible Bonds (FCCB) and raised $239 million. Proceeds from the FCCBs will be drawn in tranches and these bonds will be divided into 10 series.

In its filing, ZEEL informed SEBI that considering the receipt of remittance of USD 23900000 from Resonance Opportunities Fund, St. John’s Wood Fund Limited and Ebisu Global Opportunities Fund (‘Investors’) towards subscription of 5% coupon, unsecured, unlisted, foreign currency convertible bonds of USD 1000 each maturing in 10 years (“FCCBs”), the Securities Issue and Allotment Committee of the Company has, inter-alia, considered and approved the allotment of FCCBs on a private placement basis to Investors.

In rupee terms, the total fund raised amounts to Rs 1,997 crore. The company's board had approved raising funds up to Rs 2,000 crore on June 6 via various methods, including the issue of equity shares.

Zee Entertainment had said it has plans to invest these funds to enhance strategic flexibility to pursue growth opportunities in the evolving media landscape.


ZEEL raises $239 million through 10-year Foreign Currency Convertible Bonds

Disney-owned Star India terminated its alliance agreement with Zee Entertainment for the $1.5 billion International Cricket Council (ICC) TV rights on June 20, according to a regulatory filing by Zee.

However, the broadcaster has decided to seek damages during the arbitration proceedings, which have not yet been quantified. Star initiated arbitration proceedings against Zee before the London Court of International Arbitration (LCIA) on March 14.

On Wednesday, Zee stated that Star India terminated the agreement on June 20, citing a breach of contract. The original agreement, signed on August 26, 2022, had positioned Zee as a key player in broadcasting major ICC events, including the ICC Men’s T20 World Cups and the ICC Men’s Cricket World Cup.

“During the previous year, Star had sent letters to Zee alleging breach of the Alliance Agreement due to non-payment of dues for the rights fee's first instalment, aggregating to $203.56 million, along with the payment for bank guarantee commission and deposit interest aggregating Rs 17 crore, and financial commitments, including furnishing of corporate guarantee/confirmation as stated in the agreement,” Zee said in its disclosure.

“Based on legal advice, the management believes that Star has not acted in accordance with the Alliance Agreement and has failed to obtain necessary approvals and execute the required documentation and agreements," the company added.

The now-terminated deal would have granted Zee exclusive television rights to major ICC men’s events, including two ICC Men’s T20 World Cups (2024, 2026), the ICC Men’s Champions Trophy (2025), the ICC Men’s Cricket World Cup (2027), and key ICC U-19 events.


Star India terminates $1.5 billion worth ICC sub-licensing deal with Zee

Zee Entertainment Enterprises Limited (ZEEL) received shareholders’ nod to raise Rs 2,000 crore via the issuance of securities, the company informed via a filing to the exchanges on Monday, July 15. Out of the total votes cast, 78.83% were in favour of the resolution while 21.16% were against it.

The announcement was made after the market hours and the stock ended at Rs 160.34 on the NSE on Monday, up by Rs 4.84 or 3.11% over the closing price on Friday. “The remote e-voting process concluded today i.e., Monday, July 15, 2024, at 5:00 p.m. (IST),post which the Scrutinizer appointed for scrutiny of Postal Ballot process, Ms. Vinita Nair (Membership No. F10559), Senior Partner, M/s. Vinod Kothari & Co., Company Secretaries, has submitted her report on the results of the Postal Ballot. Based on the report of the Scrutinizer, we hereby inform you that the shareholders of the Company have duly passed the resolution for issuance of securities for an amount not exceeding Rs 2,000 crore with requisite majority,” Zee said in a regulatory filing.

ZEEL plans to invest these funds to enhance strategic flexibility to pursue growth opportunities in the evolving media landscape. The funds will be raised by issuance of equity shares and or/any other eligible securities. 

On July 11, Zee Entertainment had informed the bourses that its board of directors will meet on July 16 to discuss fundraising options. These options include private placements, Qualified Institutional Placements (QIP), and preferential issues. 

The announcement outlined plans for issuing securities in multiple tranches to enhance the company’s strategic flexibility and support future growth opportunities in the media industry. The disclosure followed the board’s previous decision on June 6 to approve raising funds amounting to Rs 2,000 crore, crucial for enhancing strategic options and seizing growth prospects.
