Zee Entertainment Enterprises Ltd (ZEEL) has demanded a termination fee of $90 million (nearly Rs 748.7 crore) from the Sony Group after the latter called off their $10 billion merger deal earlier this year. In a regulatory filing on Thursday, ZEEL disclosed that it is seeking the fee from two Sony Group entities: Sony Pictures Networks India (SPNI), now known as Culver Max Entertainment, and Bangla Entertainment (BEPL).
The filing stated that ZEEL terminated the Merger Cooperation Agreement (MCA) due to breaches by Culver Max and BEPL. "Culver Max and BEPL have failed to comply with their obligations under the MCA. Therefore, the company has terminated the MCA and called upon Culver Max and BEPL to pay the termination fee i.e. the aggregate amount equal to $90 million in accordance with the MCA," the filing read.
On January 22, 2024, Sony Group Corporation (SGC) had claimed that ZEEL did not meet the merger conditions and initiated arbitration proceedings at the Singapore International Arbitration Centre (SIAC), seeking the same termination fee of $90 million. ZEEL contested this at the SIAC, which denied any interim relief to Sony against the Indian broadcaster.
ZEEL also pursued the implementation of the proposed merger through the National Company Law Tribunal (NCLT) but later withdrew its plea.
"We hereby wish to inform you that the company has, on account of Culver Max’s and BEPL’s breaches under the MCA, terminated the MCA by issuing a letter dated May 23, 2024, and sought a termination fee from Culver Max and BEPL in accordance with the provisions of the MCA," the filing said.
The merger agreement between ZEEL and SPNI was initially signed on December 22, 2021. The Mumbai bench of the NCLT approved the merger scheme on August 10, 2023, which was expected to create a $10 billion media entity. However, Sony Corporation terminated the agreement on January 22, 2024, two years after the initial agreement.
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