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Zee stressed at Sony merger

To create media firm with the biggest viewership

Zee Entertainment Enterprises Ltd. has begun settlement talks with its creditors to pay off debt and clear the final hurdle to completing a merger with Sony Group that would create a $10 billion media giant, according to people familiar with the matter.
An Indian television network has offered IDBI Bank Ltd., one of the creditors that went to bankruptcy court, to repay a loan of about 1.49 billion rupees ($18.1 million) in tranches, the people said, speaking on condition of anonymity because the information they are not t public. The founders of Zee are in separate talks with Axis Bank Ltd. and the asset reconstruction unit of JC Flowers & Co. to settle fees of Rs 400 crore each paid to entities controlled by them, they said.

The installments are key to the merger, which will create a media company with the largest audience and pricing power in a country of more than 1.4 billion people. Sony Pictures Networks India Pvt. will own a little more than half the shares after the deal is completed, with Zee‘s founders holding 3.99%, while public shareholders will get the rest.
Several creditors of the company and its founders turned to the bankruptcy court for repayments. Just last month, the company paid off debts to one lender, IndusInd Bank Ltd. and the lender will withdraw its objections to the merger, Zee said in the filing.

An Axis Bank spokesperson declined to comment, while representatives of Zee, JC Flowers and IDBI Bank did not respond to emails and phone calls seeking comment.
Atlanta-based Invesco Developing Markets Fund, which held the largest stake in Zee at the time of the merger announcement with an 18% stake, exited all its holdings in the company last week, stock market reports show. India’s antitrust regulator approved the sixteen-month-old merger agreement in October.

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