Multichoice Group, the South African Pay-TV operator, has announced a significant financial setback, writing off N31.6 billion (approximately $21 million) in cash held with the recently liquidated Heritage Bank.
This loss was disclosed in the company’s half-year results for the period ending September 30, 2024.
The company had previously reported a deposit of N33.7 billion with Heritage Bank in its FY 2024 report.
However, this amount was reduced to N31.6 billion after the bank’s liquidation process began following the Central Bank of Nigeria’s (CBN) revocation of its banking license on June 3, 2024.
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In a statement, Multichoice explained that the cash held in Heritage Bank was written off as a result of the bank’s closure, which rendered the deposit unrecoverable.
“Following the revocation of Heritage Bank’s banking license and its subsequent liquidation, the group wrote off its receivable related to the cash held with the bank,” the company said.
This write-off is part of a broader financial impact, with Multichoice also reporting foreign exchange losses due to the continued depreciation of the Nigerian naira against the US dollar.
Despite these challenges, the company successfully repatriated $65 million from its Nigerian operations, although this amount was lower than the $91 million repatriated in the same period the previous year.
The company incurred extraction losses of $1 million, or ZAR20 million, in the process.
Multichoice also disclosed that it held $11 million in cash in Nigeria at the end of the period, a sharp decline from the $39 million reported at the close of FY 2024.
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The drop in cash reserves was partly attributed to the impact of the naira’s depreciation and the write-off of the funds tied to Heritage Bank.
The Nigeria Deposit Insurance Corporation (NDIC), which was appointed as the liquidator for Heritage Bank, is working to reimburse insured depositors up to the maximum limit of N5 million.
However, Multichoice’s deposit far exceeds this amount, and the company had earlier stated its intention to engage with the NDIC to ensure a reasonable resolution.
The NDIC has since announced plans to pay uninsured depositors through dividends from the liquidation of the bank’s assets.
This latest development highlights the growing risks for businesses operating in Nigeria’s volatile financial environment, particularly as exchange rate fluctuations and banking sector instability continue to affect foreign operations in the country.
