MultiChoice Group, a leading South-African entertainment company, has forfeited its $21 million (N31.6 billion) deposited in Heritage Bank after the financial institution’s liquidation in 2024.
This was revealed in the group’s financial statements for the half-year ending September 30, 2024.
“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,” the report said.
However, the group revealed in its annual report for June 2024 that it had an account balance of N33.7 billion with Heritage Bank but it reduced to N31.6 billion due to cash remittances before the bank’s liquidation on June 3, 2024.
In nine months of 2024, the company reported lower cash remittances from Nigeria, extracting only $65 million compared to $91 million in the same period last year.
The Central Bank of Nigeria (CBN) revoked the banking license of Heritage Bank Limited (HBL), a former financial institution in Nigeria, on May 31, 2024, which enabled the National Insurance Deposit Corporation (NDIC) to move in and take over the lender’s assets and liabilities over the weekend.
The liquidation of the bank, which the NDIC describes as crucial, is part of its statutory mandate as the liquidator of failed banks under Section 62(1)(d) of the NDIC Act, 2023.
According to MultiChoice, the group held $11 million in cash in Nigeria at half-year ending September compared to $39 million in the same period last year.
“A consequence of consistent focus on remitting cash, the impact of translating the balance at the weaker naira and the write-off of the $21 million receivable relating to the cash held with Heritage Bank before its license was revoked and the bank was liquidated,” it said.
MultiChoice’s decision to write off the funds reveals how Nigerian businesses are struggling to thrive in the financial sector amid economic challenges of naira devaluation.
It noted that Nigeria accounted for 63 percent of the MultiChoice Group’s subscriber losses in its ‘Rest of Africa’ segment since FY23.
From FY23, active subscribers in the ‘Rest of Africa’ dropped significantly, with Nigeria showing a net loss of 1.1 million.
The decline, largely driven by severe economic pressures including inflation and the weakening naira, highlights Nigeria’s substantial contribution to the overall reduction in the subscriber base.
Exchange rate losses further affected the financial strain on the group’s operations in its largest African market.
“The further depreciation of the naira against the US dollar has resulted in further foreign exchange losses on non-quasi equity loans. contributing to the ZAR2.1 billion recognised in the condensed consolidated income statement,” the report said.
It added that the group extracted $65 million from Nigeria in nine months of 2024 at an average rate of N1,516/$ incurring extraction losses of $1 million or ZAR20 million in the process.
