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MultiChoice Group Limited has written off $21 million deposited in Nigeria’s Heritage Bank after the financial institution’s liquidation earlier this year.

This was disclosed in the company’s interim financial statements for the half-year ending September 30, 2024.The sum was classified as irrecoverable after the Central Bank of Nigeria revoked Heritage Bank’s operating license, effectively shutting down the institution. The financial statement read, “Following the revocation of Heritage Bank’s banking license by the Central Bank of Nigeria on June 3, 2024, and its subsequent liquidation, the group wrote off its receivable relating to the cash held with the bank.”

MultiChoice’s decision to write off the funds highlights the difficulties businesses face navigating Nigeria’s financial sector, particularly amid an unstable economic climate. The company reported lower cash remittances from Nigeria, extracting only $65 million during the period under review, compared to $91 million in the same period last year. Exchange rate losses further compounded the financial strain on the group’s operations in its largest African market.

The statement noted, “The further depreciation of the naira against the US dollar has resulted in further foreign exchange losses on non-quasi equity loans (on the USD-denominated intergroup loan from MultiChoice Africa Holdings B.V. to MultiChoice Nigeria Limited), contributing to the ZAR2.1 billion (1H FY24: ZAR2.4 billion) recognized in the condensed consolidated income statement.”

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The group extracted USD 65 million from Nigeria in the period (1H FY24: USD 91 million) at an average rate of NGN 1,516: USD (1H FY24: NGN 794: USD), incurring extraction losses of USD 1 million or ZAR 20 million (1H FY24: USD 28 million or ZAR 518 million) in the process. The group held USD 11 million in cash in Nigeria at period-end, down from USD 39 million at end FY24, due to consistent focus on remitting cash, the impact of translating the balance at the weaker naira, and the write-off of the USD 21 million receivable relating to the cash held with Heritage Bank before its license was revoked and the bank was liquidated.

MultiChoice also noted that Nigeria accounted for 63% of the group’s subscriber losses in its Rest of Africa segment since FY23, driven largely by severe economic pressures including inflation and the weakening naira. From FY23 to 1H FY25, active subscribers in the Rest of Africa dropped significantly, with Nigeria showing a net loss of 1.1 million subscribers.

The group, owners of DSTV, had previously stated that it had an account balance of N31.6 billion with Heritage Bank before the bank’s liquidation. Recently Nigeria Deposit Insurance Corporation announced plans to sell off properties and assets belonging to the defunct Heritage Bank to recover funds for uninsured depositors. This move, part of NDIC’s statutory mandate as the liquidator of failed banks under Section 62(1)(d) of the NDIC Act, 2023, is set to begin on December 4, 2024, and will involve competitive bidding for the bank’s landed properties and chattels at 36 sites nationwide.

All you need to know about MultiChoice and $21m deposited in defunct Heritage Bank

MultiChoice Group Limited is a leading entertainment company in Africa. They offer a wide range of products and services, including DStv, GOtv, Showmax, M-Net, SuperSport, Irdeto, and KingMakers. Their mission is to enrich lives through entertainment.

Regarding the $21 million deposited in Nigeria’s Heritage Bank, here’s what happened:

  • Heritage Bank was liquidated earlier this year after the Central Bank of Nigeria revoked its operating license on June 3, 2024.
  • MultiChoice Group Limited had deposited N31.6 billion (approximately $21 million) in Heritage Bank.
  • Following the bank’s liquidation, the deposit was classified as irrecoverable, and MultiChoice Group Limited had to write it off as part of their operating losses for the half-year ending September 30, 2024.

The Nigeria Deposit Insurance Corporation (NDIC) has since been appointed as the liquidator and is working to recover funds and pay out insured deposits

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Theresa Anyanwu

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