IndusInd Bank has filed a petition with the National Company Law Tribunal (NCLT) seeking permission to initiate insolvency proceedings against Zee Entertainment Enterprises Ltd (ZEEL).
The private sector lender has claimed that ZEEL defaulted on loans worth Rs 83.08 crore.
ZEEL disclosed the development in a regulatory filing with the stock exchanges on Friday evening.
“An application has been filed... by IndusInd Bank Ltd, claiming to be a financial creditor, before the NCLT, Mumbai for initiation of Corporate Insolvency Resolution Process (CIRP) against the company, claiming a default of Rs 83.08 crore,” ZEEL said.
The application has been filed under Section 7 of the Insolvency & Bankruptcy Code (IBC). Under Section 7 of IBC, a financial creditor may move NCLT for initiation of CIRP for a default of Rs 1 crore and above.
ZEEL added that it is party to the Debt Service Reserve Account Guarantee Agreement’ (DSRA Guarantee Agreement) entered into with IndusInd Bank for the term-loan facility advanced to another Essel Group firm, Siti Networks Ltd.
ZEEL, however, maintains that the issue of the company's alleged default under the DSRA Guarantee Agreement, is sub-judice before the Delhi High Court in a suit filed by the company against IndusInd Bank. The firm added that it will be taking appropriate legal steps in this regard.
In December last year, ZEEL had announced a merger with Sony Pictures Networks India Pvt Ltd (SPNI) after signing definitive agreements.
Under the terms of the deal, Sony will invest $ 1.575 billion and hold a 52.93 per cent stake in the merged entity. Zee will hold the remaining 47.07 per cent.
The company has also been in the news over a dispute with its largest shareholder, Invesco, which had tried unsuccessfully to remove managing director & CEO Punit Goenka and appoint six independent directors.