Multichoice Records N31.6 Billion Loss in Heritage Bank Liquidation
South African pay-TV giant, Multichoice Group, has announced a significant financial setback, writing off N31.6 billion ($21 million) held in cash with Heritage Bank, which was recently liquidated by the Central Bank of Nigeria (CBN).
This development was revealed in Multichoice’s financial results for the six-month period ending September 30, 2024. The company initially reported a deposit of N33.7 billion with the bank as of March 31, 2024. However, the balance was adjusted to N31.6 billion following partial remittances before Heritage Bank’s license was revoked on June 3, 2024.
“Following the revocation of Heritage Bank’s banking licence 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 stated in its report.
The N31.6 billion loss was listed among operating losses for the review period. Additionally, Multichoice reported foreign exchange losses due to the depreciation of the naira against the US dollar. The Group’s intergroup loans, particularly from MultiChoice Africa Holdings B.V. to MultiChoice Nigeria Limited, suffered as a result of the exchange rate fluctuations.
Despite the challenges, Multichoice managed to repatriate $65 million from its Nigerian operations during the period, although this was a decline from the $91 million repatriated in the same period of the previous fiscal year.
The company further disclosed that its remaining cash holdings in Nigeria stood at $11 million, down from $39 million at the end of FY24. This reduction was attributed to the write-off of funds held with Heritage Bank, the weaker naira, and consistent efforts to remit cash to its headquarters.
Heritage Bank’s liquidation was overseen by the Nigeria Deposit Insurance Corporation (NDIC), following CBN’s revocation of its license. The NDIC has begun compensating insured depositors up to a maximum of N5 million per account.
Multichoice, whose deposits exceed the NDIC’s insurance coverage, initially expressed intentions to work with the corporation to recover its funds. The NDIC has assured stakeholders of ongoing efforts to recover debts and liquidate the bank’s assets to pay uninsured depositors through liquidation dividends.
While the loss marks a significant financial hit for Multichoice, the Group remains focused on mitigating risks and navigating the operational challenges posed by Nigeria’s economic environment.
