Indian Performing Right Society (IPRS), an operational creditor to Zee Entertainment Enterprises, has agreed to withdraw an insolvency petition filed against the media firm for defaulting on payment of Rs 211.42 crore.
The company and IPRS mutually entered into the settlement agreement on Monday, following which IPRS agreed to withdraw the petition.
There is no penalty paid and no material impact on the financial position of the company, Zee said in a stock exchange update.
On January 2, IPRS had filed a petition before the Mumbai bench of the National Company Law Tribunal (NCLT) under Section 9 of the Insolvency and Bankruptcy Code (IBC), seeking initiation of corporate insolvency resolution process against the Essel Group company.
According to Zee, the amount was “unascertained” as the matter was disputed and sub judice and the creditor was claiming debt and default towards royalty payable for utilisation of “literary and musical works”.
Zee had also said it would file a reply rejecting the claim on the grounds that there was a pre-existing dispute between the parties on the claimed amount. Further, the claim is not in consonance with the interpretation of the law on payment of royalties, it had added.
In December 2022, private lender IDBI Bank
In February this year, NCLT’s Mumbai bench permitted initiating insolvency proceedings against Zee, admitting the petition filed by IndusInd Bank. This was later stayed by the National Company Law Appellate Tribunal.