MultiChoice Group Limited has written off $21 million deposited with Nigeria’s Heritage Bank, following the bank’s liquidation earlier this year.
This revelation was included in the company’s interim financial report for the half-year ending September 30, 2024.
The amount was deemed irrecoverable after the Central Bank of Nigeria revoked Heritage Bank’s operating license, resulting in its closure.
The financial statement document read, “Following the revocation of Heritage Bank’s banking licence by the Central Bank of Nigeria on 3 June 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 challenges businesses face navigating Nigeria’s financial sector, especially in an unstable economic environment.
Nigeria continues to be a tough market for MultiChoice, as the company contends with surging inflation and a steadily weakening naira.
The group also reported a decline in cash remittances from Nigeria, extracting only $65 million during the review period compared to $91 million in the same period last year. Exchange rate losses further exacerbated the financial pressures on its operations in its largest African market.
It 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 ZAR2.1bn (1H FY24: ZAR2.4bn) recognised in the condensed consolidated income statement.
“The group extracted USD65m from Nigeria in the period (1H FY24: USD91m) at an average rate of NGN1,516:USD (1H FY24: NGN794:USD), incurring extraction losses of USD1m or ZAR20m (1H FY24: USD28m or ZAR518m) in the process.
“The group held USD11m in cash in Nigeria at period-end, down from USD39m at end FY24, a consequence of consistent focus on remitting cash, the impact of translating the balance at the weaker naira and the write-off of the USD21m receivable relating to the cash held with Heritage Bank before its license was revoked and the bank was liquidated.”
The company revealed that Nigeria accounted for 63% of subscriber losses in MultiChoice Group’s Rest of Africa segment since FY23.
The decline, driven by intense economic pressures such as high inflation and the weakening naira, underscores Nigeria’s significant impact on the overall drop in subscriber numbers.
Between FY23 and 1H FY25, active subscribers in the Rest of Africa fell sharply, with Nigeria recording a net loss of 1.1 million. MultiChoice, the parent company of DStv, previously disclosed that it had a balance of ₦31.6 billion with Heritage Bank before the bank’s liquidation.
Waffi TV recently reported that the Nigeria Deposit Insurance Corporation (NDIC) plans to sell off Heritage Bank’s properties and assets to recover funds for uninsured depositors.
This initiative, deemed essential by the NDIC, aligns with its mandate under Section 62(1)(d) of the NDIC Act, 2023. The sale, set to commence on December 4, 2024, will feature competitive bidding for the bank’s landed properties and chattels across 36 sites nationwide.
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