BENGALURU, Jan 9 Reuters India39;s Zee Entertainment said on Tuesday it was committed to its merger with Sony39;s local arm, after media reports said the Japanese firm was planning to scrap the 10 billion deal.

Zee said reports of the deal falling through were baseless and factually incorrect, and that it continues to work towards closing the deal.

Sony plans to file a termination notice before the Jan. 20 deadline to close the deal over an impasse on whether Zee CEO Punit Goenka, who is facing a regulatory probe, will lead the merged company, Bloomberg News said on Monday.

Zee39;s shares closed down nearly 8. They sank nearly 14 earlier on concerns about the fate of cashstrapped Zee in a highly competitive market, if the merger did not go through.

Analysts say the deal is crucial to the companies39; survival amid the looming merger of local heavyweight Reliance Industries and Walt Disney39;s Indian media and entertainment businesses.

The merger was also aimed at taking on streaming giants Netflix and Amazon.com.

Zee, which has been struggling with declining advertisement revenue, saw its cash reserves fall to 2.48 billion rupees in the six months ended Sept. 30, from 5.88 billion rupees in the yearago period. Its net profit slumped 68 in the same period.

It would be surprising if the merger collapses as both companies will find it incredibly difficult to operate as single entities in India, keeping in mind the ongoing merger proceedings between Reliance and…