Zee Entertainment Enterprises (ZEEL) has entered into a settlement agreement with the Indian Performing Right Society (IPRS) in a case pertaining to default in music royalty payments. As per the agreement, IPRS, which protects the interests of music artistes, will withdraw its insolvency petition filed against the debt-laden company.
“We wish to update you that the company and IPRS have entered into a settlement agreement by which all disputes and claims have been settled between the company and IPRS and accordingly IPRS has agreed to withdraw the aforesaid insolvency petition filed by them,” ZEEL said in a late evening exchange filing on Monday.
The company didn’t disclose the settlement terms. However, it said, “There is no penalty paid and no material impact on the financial position of the company.”
In January this year, IPRS had filed a plea at the Mumbai bench of the National Company Law Tribunal (NCLT) to initiate a corporate insolvency resolution process against Zee Entertainment, claiming a default of ₹211.41 crore in music royalty payments. The artistes’ body had filed the application as an operational creditor claiming dues towards royalty payable for utilisation of "literary and musical works"
Founded in 1969, the Indian Performing Right Society (IPRS) is the representative body of music owners, composers, lyricists (or authors), and the publishers of music and is also the sole authorised body to issue licenses for the usage of musical works & literary music in India.
Earlier on February 24, the National Company Law Appellate Tribunal (NCLAT) stayed insolvency proceedings against the company. Hearing a plea of Punit Goenka, MD and CEO of ZEEL, the tribunal stayed the bankruptcy proceedings initiated by the NCLT and asked IndusInd Bank to file its reply in two weeks. The NCLT had admitted the case after ZEEL failed to fulfill its debt obligations to IndusInd Bank regarding the payment of more than ₹83 crore loan issued to Siti Networks. The court has also admitted IndusInd’s insolvency plea against Siti Networks and appointed an interim resolution professional.
In February last year, IndusInd Bank filed a bankruptcy case against debt-laden Zee Entertainment with the NCLT under the Insolvency and Bankruptcy Code (IBC). The case pertains to alleged default of ₹83.08 crore term loan facility issued to Siti Networks, a cable TV operator promoted by Essel Group. Zee was a party to the Debt Service Reserve Account Guarantee Agreement (DSRA Guarantee Agreement) signed with IndusInd Bank for the term loan facility advanced to Siti Networks.
Last December, private lender IDBI Bank moved NCLT seeking initiation of insolvency proceedings against ZEEL, claiming ₹149.60 crore of default under a debt service reserve agreement entered into by the bank and the company for the financial facility availed by SITI Networks. Besides, in April last year, Housing Development Finance Corporation Ltd (HDFC) also filed an insolvency application against SITI Networks Ltd for alleged default of ₹296 crore.
