IndusInd Bank files for bankruptcy against Zee for payment default
Private sector lender IndusInd Bank has filed for bankruptcy against indebted Zee Entertainment with the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC). The case concerns the alleged default of a ₹83.08 crore term loan facility granted to Siti Networks, a cable television operator promoted by the Essel Group headed by Subhash Chandra.
“A claim has been brought against the company, under section 7 of the Insolvency and Bankruptcy Code, 2016, read together with Rule 4 of the Insolvency and Bankruptcy Rules 2016 (application to the contracting authority), by IndusInd Bank Limited, claiming to be a financial creditor, before the Hon’ble National Company Law Tribunal, Mumbai Bench for the commencement of corporate insolvency resolution proceedings against the company, claiming a default of ₹83.08 crore,” Zee Entertainment said in a filing at BSE aftermarket time on Friday.
Zee further stated that it is a party to the Debt Service Reserve Account Guarantee Agreement (DSRA Guarantee Agreement) signed with lnduslnd Bank for the term loan facility provided to Siti Networks.
“The matter of the Company’s alleged breach under the DSRA Guarantee Agreement is pending in the Hon’ble Delhi High Court in Case No. (CS (Comm) 500/2020) filed by the Company against lnduslnd Bank “, he added. .
Zee claimed that the case was pending in the Delhi High Court and that the filing of the application for Corporate Insolvency Resolution Proceedings (CIRP) against the company was in breach of an order made during the company’s appeal on December 3, 2021. The company will take appropriate legal action in this regard, he added.
“The filing of said CIRP request is contrary to the Order of February 25, 2021 as amended by the Order of December 3, 2021 rendered in Company Call Number (FAO(OS)(Comm) 15/2021 ) in said combination. The company will therefore take appropriate legal measures in this regard,” Zee Entertainment said in the filing.
Prior to the announcement, Zee Entertainment shares ended down 3.2% at ₹278.30 each on BSE.