MARKET UPDATES: On Thursday, the National Stock Exchange (NSE) announced that Zee Entertainment Enterprises Ltd (ZEEL) had been dropped from the futures and options (F&O) segment. This comes after IndusInd Bank's insolvency claim against the company was admitted by NCLT.
On Wednesday, the Mumbai branch of the National Company Law Tribunal (NCLT) accepted an insolvency case submitted under Section 7 of the Insolvency and Bankruptcy Code by the media company Zee Entertainment Enterprises Ltd. (IBC).
However, the NSE circular states that "new strikes would also be introduced in the existing contract months" and that "the existing unexpired contracts of expiry months March 2023 and April 2023 would continue to be accessible for trade till their respective expiry."
From April 28, 2023, no contracts will be offered for trading, it was added.
As insolvency proceedings were opened against the company due to a debt default, shares of Zee Entertainment continued to fall for a second consecutive day on the BSE in early Friday trades. The stock dropped as much as 5% in early trade after declining by around 4% at session's end. The stock was down 1.26% to Rs. 196.25 on the BSE at 11:15.
In its filing, IndusInd Bank accused the business of defaulting by Rs. 83.08 crore. ZEEL is a party to the Term Loan Facility Provided to Siti Networks Ltd. under the Essel Group Debt Service Reserve Account (DSRA) Guarantee Agreement put into with IndusInd Bank.
The Essel group company had guaranteed the bank's Rs. 150 crore loan to Siti Networks in accordance with the provisions of the DSRA agreement between the bank and the latter, to which Zee is also a party. Notwithstanding promises, Zee had failed to keep a sum in the account for the purpose of paying its debts that was equivalent to one quarter's principal plus one quarter's interest at all times.
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