Heritage Bank Liquidation: Multichoice Writes Off N31.6 Billion

Multichoice Absorbs N31.6 Billion Loss from Heritage Bank's Collapse

“Following the revocation of Heritage Bank's banking licence by the Central Bank of Nigeria on 3 June...”

Multichoice suffers N31.6 billion loss due to Heritage Bank's liquidation. Read more about the impact on the media giant's finances.

Multichoice Group, a leading South African Pay-TV operator, has revealed a significant financial setback. In its latest financial results for the six months ending September 30, 2024, the company announced that it has written off N31.6 billion ($21 million) held in Heritage Bank, which was recently liquidated.

In its FY 2024 annual report released in June, Multichoice had initially reported a deposit of N33.7 billion with Heritage Bank as of March 31, 2024. However, following subsequent cash withdrawals before the bank's liquidation on June 3, 2024, the balance was reduced to N31.6 billion.

Multichoice's financial disclosure provides transparency on the impact of Heritage Bank's liquidation on its finances. The company's proactive measures to adjust its balance sheet reflect its commitment to maintaining fiscal responsibility.

Multichoice Group disclosed that it incurred a significant financial loss due to the liquidation of Heritage Bank. “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 company stated.

This loss contributed to the Group's operating losses of $21 million for the half-year. Additionally, the continued depreciation of the naira against the US dollar resulted in foreign exchange losses on non-quasi equity loans, specifically the USD-denominated intergroup loan from MultiChoice Africa Holdings B.V. to MultiChoice Nigeria Limited.

Despite these challenges, Multichoice successfully repatriated funds from its Nigerian operations to its headquarters. However, the amount repatriated was lower compared to the previous year.

Financial Details:

Heritage Bank Liquidation Loss: $21 million

Foreign Exchange Losses: Due to naira depreciation against the US dollar

Loan Impact: USD-denominated intergroup loan from MultiChoice Africa Holdings B.V. to MultiChoice Nigeria Limited

Repatriated Funds: Lower amount compared to the previous year

“The group extracted USD65 million from Nigeria in the period (1H FY24: USD91 million) at an average rate of NGN1,516:USD NGN794:USD), (1H FY24: incurring extraction losses of USD1 million or ZAR20 million (1H FY24: USD28 million or ZAR518m) in the process.

“The group held USD11 million in cash in Nigeria at period-end, down from USD39 million at end FY24, a consequence of consistent focus on remitting cash, the impact of translating the balance at the weaker naira and the write-off of the USD21 million receivable relating to the cash held with Heritage Bank before its license was revoked and the bank was liquidated,” it stated.