NCLT Mumbai Admits Merger Scheme For Viacom18, Digital18, And Star India

NCLT Mumbai Admits Merger Scheme For Viacom18, Digital18, And Star India

A division bench comprising Anu Jagmohan Singh (Technical Member) and Justice Kishore Vemulapalli (Judicial Member) approved a Composite Scheme of Arrangement for merger among Viacom18, Digital18, and Star India under Sections 230 to 232 of the Companies Act, 2013, in accordance with the Companies (Compromises, Arrangements, and Amalgamation) Rules, 2016. The bench directed comprehensive steps to ensure compliance with statutory requirements, including convening meetings and issuing detailed procedural instructions for the approval process.

In the present case, the applicant companies have proposed a Composite Scheme of Arrangement ("Scheme") among Viacom18 Media Private Limited ("Viacom18") and its shareholders and creditors, Digital18 Media Limited ("Digital18") and its shareholders and creditors, and Star India Private Limited ("Star India") and its shareholders and creditors under Sections 230 to 232 and other relevant provisions of the Companies Act, 2013. The proposed scheme includes: (1) the transfer of Media Operations Undertaking from Viacom18 to Digital18, (2) the transfer of Jio Cinema Undertaking from Viacom18 to Digital18, and (3) the demerger, transfer, and vesting of V18 Undertaking from Digital18 into Star India. The Boards of Viacom18 and Star India approved the Scheme on February 28, 2024, and March 27, 2024, respectively, while the Board of Digital18 approved it on March 27, 2024.

Viacom18, incorporated on December 19, 1995, is involved in broadcasting, advertising, OTT streaming (Jio Cinema), licensing, live events, and motion picture production. Digital18, incorporated on January 30, 2020, is a wholly owned subsidiary of Viacom18. Star India, incorporated on February 8, 1994, is engaged in television broadcasting and motion picture production and distribution.

Under the Scheme, Digital18 will issue equity shares to Viacom18 for the transfer of Media Operations and Jio Cinema Undertakings. Additionally, Star India will issue equity shares to Digital18 shareholders and Reliance Industries Limited (RIL) according to the specified ratio.

The NCLT acknowledged that all equity and preference shareholders of Viacom18, Digital18, and Star India provided their consent through affidavits. Subsequently, the NCLT accepted the merger scheme involving Reliance Industries' Viacom18, its subsidiary Digital18, and Walt Disney's Star India. The NCLT directed the convening of meetings for secured creditors of Viacom18 and unsecured creditors of Viacom18 and Star India on June 12, 2024. Justice (Retd.) Shri Suresh Chandrakant Gupte was appointed as the Chairperson, and Mr. B. Narsimhan as the Scrutinizer.

The NCLT instructed the service of notices to various regulatory bodies, including the Central Government, Income Tax Authorities, GST Authorities, Ministry of Corporate Affairs, Competition Commission of India, and the Official Liquidator, along with creditors, under the provisions of Section 230(5) of the Companies Act, 2013, and Rule 8 of the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016. Additionally, the NCLT mandated the Applicant Companies to provide:

i. Details of Corporate Guarantee, Performance Guarantee, and Other Contingent Liabilities, if any.

ii. A list of pending IBC cases, if any, along with all other litigation pending against the applicant companies that have a material impact on the proposed Scheme.

iii. Details of all Letters of Credit sanctioned and utilized, as well as Margin Money details, if any.

Furthermore, the NCLT directed the applicant companies to file an affidavit of service within 10 working days after serving notices to all the regulatory authorities mentioned above and to report the results within seven days post-meetings.