Sony Pictures Networks India, one of the two leading sports broadcasters in the country, has filed an insolvency petition against multi system operator (MSO) Ortel Communications over unpaid dues.
SPNI had moved National Company Law Tribunal (NCLT) against Ortel Communications in July over ₹12 crore payment default. The matter has been listed for further hearing tomorrow, Tuesday.
Ortel had recently informed the Bombay Stock Exchange (BSE) that Sony has filed a petition against the company under the Insolvency and Bankruptcy Code, 2016 (IBC). It further stated that due to poor performance and bad financial condition, the company has no defence for that.
As per the order of the NCLT, consent of the Board has been accorded to file an Affidavit on behalf of the Company before the NCLT to the effect of admitting the default and for initiation of Corporate Insolvency Resolution Process (CIRP).
The company’s situation remains tense amid the current financial muddle which also saw the exit of two Directors with Jyoti Bhusan Pany and Joseph Puliparambil resigning from the company with effect from September 12.
SPNI had, according to a report by Television Post, switched off signals of its channels to Ortel in June due to unpaid dues. The Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had also refused to provide relief to the financially sick company. Ortel had moved TDSAT in May against disconnection notice by SPNI.
In the order dated 3 August, the tribunal had noted that the MSO has not made arrangements for paying anything even the admitted dues. By way of last opportunity, Ortel was granted six weeks’ time.
“If the petitioner is seriously interested in reviving its business with the respondent (SPNI), it must come ready with a substantial amount of money and a payment plan by the next date, otherwise petition may be disposed of on the ground that it is not possible to grant relief to the petitioner (Ortel),” the tribunal had said in an interim order.
Ortel had offered to clear the arrears in installments of various amounts through cheques in the hearing on May 15. The company had claimed that the dues are in the vicinity of ₹7 crore while Sony argued that the MSO owes it ₹12 crore in dues.
In fact, SPNI counsel had filed certain documents and charts to prove that about 50 cheques issued by the MSO in the recent past six months have bounced. SPNI had argued that the MSO must clear at least the admitted amount of Rs. 7 crore and odd till date to get an interim protection.
However, the tribunal refused to grant interim protection to the MSO considering the poor credibility of its assurances in the past. The tribunal had also kept it open for the parties to enter into negotiation to settle the terms as to how they may move forward.
In the first quarter of financial year 2019, Ortel had narrowed its net loss to ₹13.5 crore from ₹80.2 crore in the preceding quarter. The company’s EBITDA had dropped to ₹60 lakh compared to ₹5 crore in the sequential quarter.
Total income had fallen to ₹31.7 crore from ₹39.7 crore. Expenses dropped to ₹46.1 crore compared to ₹50.6 crore a quarter ago. Total receivables stand at ₹23.9 crore compared to ₹23.8 crore.
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