MultiChoice has admitted to writing off 31.6 billion naira (about $21 million) of deposits with Heritage Bank following the bank’s liquidation in June 2024. The South African pay-TV operator revealed the loss in its financial statements for the six months ended September 30, 2024.
Initial deposits stood at 33.7 billion naira as of March 31, 2024, but had already dwindled to 31.6 billion naira due to cash transfers before the bank’s closure.
Heritage Bank’s banking license was revoked by the Central Bank of Nigeria (CBN) on June 3, 2024, and the Nigerian Deposit Insurance Corporation (NDIC) was appointed as liquidator. MultiChoice explained in a statement that the deposits were written off as part of operating expenses for the period. “Following the revocation of Heritage Bank’s banking license and its subsequent liquidation, the group has written off its receivable relating to the cash held with the bank,” the company said.
The financial setback was further exacerbated by the continued devaluation of the naira, resulting in further foreign exchange losses for the company. MultiChoice also reported a decline in funds remitted from Nigeria. $65 million was withdrawn in the first half of 2024, compared with $91 million a year ago. As of end-September 2024, MultiChoice had $11 million in cash in Nigeria, down significantly from the $39 million reported at the end of 2024.
The company was undeterred by these challenges and focused on transferring cash out of Nigeria, but the process was hampered by the weakening naira and large write-downs related to Heritage Bank.
The amount MultiChoice is seeking to recover exceeds the maximum insured amount per depositor of 5 million naira, but NDIC said it was working to ensure that all depositors, including those with balances above the insured limit, benefit from the bank’s dividend liquidation.
These financial challenges have further exacerbated MultiChoice’s problems in Nigeria, where the company has seen an 18% drop in the number of active DStv subscribers and a drop in overall revenue.
