MultiChoice Group Limited has written off $21 million previously held in Nigeria’s Heritage Bank following the bank’s liquidation earlier this year.
This write-off was reported in the company’s interim financial statements for the half-year ending September 30, 2024. The Central Bank of Nigeria revoked Heritage Bank’s operating license in June, leading to its closure and rendering MultiChoice’s funds with the bank irrecoverable.
The financial report stated, “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.”
This move underscores the challenges businesses face in Nigeria’s financial sector, where economic instability has created a complex landscape for foreign enterprises. MultiChoice, which owns DStv, has been grappling with soaring inflation and a continuously depreciating naira, which have adversely affected its operations in its largest African market.
During this reporting period, MultiChoice’s cash remittances from Nigeria dropped significantly to $65 million, down from $91 million in the same period last year. The company also recorded substantial foreign exchange losses on USD-denominated intergroup loans, amounting to ZAR2.1 billion in the condensed consolidated income statement.
“The group extracted USD65 million from Nigeria in the period (1H FY24: USD91 million) at an average rate of NGN1,516:USD (1H FY24: NGN794:USD), incurring extraction losses of USD1 million or ZAR20 million (1H FY24: USD28 million or ZAR518 million),” the report noted. At the end of the period, MultiChoice’s cash reserves in Nigeria had dropped from $39 million to $11 million due to ongoing remittance efforts and the impact of the naira’s depreciation.
The firm also noted that Nigeria has accounted for 63 percent of the group’s subscriber losses in the Rest of Africa segment since FY23. Economic pressures, including inflation and currency devaluation, have contributed to a substantial decline in its Nigerian subscriber base, which showed a net loss of 1.1 million active subscribers from FY23 to the first half of FY25.
MultiChoice had previously held an account balance of N31.6 billion with Heritage Bank before the bank’s closure.