Zee Entertainment Enterprises has withdrawn a merger implementation application against the Sony group from the National Company Law Tribunal. ZEE says it has decided to withdraw the "merger implementation application" filed before the Mumbai branch of the NCLT against Sony.

The application was filed by ZEE on January 24, 2024, seeking directions on the implementation of the Composite Scheme of Arrangement between ZEE, Culver Max Entertainment, and Bangla Entertainment.

ZEE says the decision will enable it to pursue growth and evaluate “strategic opportunities” to generate higher value for all shareholders. ZEE says its decision to withdraw the “implementation application” will enable it to continue to pursue all its claims against Sony in the ongoing arbitration proceedings at the Singapore International Arbitration Centre (SIAC) and in other forums.

ZEE’s chairman R. Gopalan says the company's immediate priority is to focus on performance and achieve its targeted goals. “We have reviewed the key steps taken by the management over the last few months that are result-oriented, and we believe that the company is well poised to chart a stronger growth trajectory.”

The entertainment company has of late taken major steps to enhance productivity by focusing on a three-pronged approach – frugality, optimisation and quality content. ZEE’s managing director and CEO Punit Goenka recently proposed to lay off 15% of the workforce as it looks to cut employee costs. The proposed structure is aimed towards arriving at a cost-effective operational model with speed and agility as the core focus. This came days after Goenka took a voluntary 20% salary cut.

Shares of ZEEL, meanwhile, closed 4.05% up at ₹147.70 on the BSE on Tuesday. The share is trading 52.6% down compared to the 52-week high of ₹299.50 touched on December 12, 2023. Zee's stock has faced a huge beating since the merger plan between Sony and Zee collapsed in January 2024. The company's current m-cap stands at ₹14,186.87 crore, a huge fall from its peak of ₹40,000 crore.

In Q3 FY24, ZEE's advertising and other segment revenue declined 3% and 36% on a YoY basis to ₹1,030 crore and ₹100 crore, respectively. However, the subscription revenue recorded a 3% growth on a YoY basis, amounting to ₹920 crore.

On January 22, 2024, the Japanese entertainment behemoth Sony Group Entities ended two-year-long merger negotiations with ZEE, citing the inability of the latter to fulfil the merger agreement. Sony also approached the international arbitration court and sought a termination fee worth $90,000,000 for "alleged breaches" by ZEE. The $10-billion deal, initially announced in December 2021, would have created the country’s largest entertainment network with more than 70 entertainment channels giving an edge to its rivals such as Hotstar, Amazon Prime and Jio Cinema.

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