The appeal filed by Axis Finance in the National Company Law Appellate Tribunal (NCLAT) against the Mumbai bench of NCLT’s order approving the merger of media companies ZEE and Sony is not likely to have any bearing on the ongoing merger process, according to Elara Capital.
Zee Entertainment has notified the Bombay Stock Exchange (BSE) based on the NCLAT’s notice in response to Axis Finance’s plea. Market analyst Elara has ruled out any negative impact, terming the same as ‘more noise’.
An Elara Capital spokesperson said, “We believe the above issue of Axis Finance approaching the National Company Law Appellate Tribunal (NCLAT) will not have any impact on the merger between Zee and Sony because the claims being pursued by Axis Finance, which amount to ~INR 1,000 mn, are not directed at Zee but rather at its parent company, Essel Group.”
“As mentioned in the NCLT merger order (Zee/Sony), Axis Finance has previously approached various legal bodies, including the Debt Recovery Tribunal (DRT) and high courts, for above claims; however, judgements on the same have not been in their favour (Axis Finance). Therefore, we believe these claims lack merit and will not impact the merger. Also, appeals with NCLAT may continue for months even after the merged company is formed, just like in the case of PVR-Inox merger,” according to an Elara statement.
The merger is progressing with the Registrar of Companies (ROC), post receipt of the NCLT order and is expected to be completed by the last week of October 2023.
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