The half-year of 2024 did not end well for MultiChoice Group Limited, a South African Pay-TV operator in Nigeria as the economic hardship in the country bites harder.
Besides the devastating effects of the depreciation of the Naira on the company, the closure of Heritage Bank, one of Nigeria’s top financial institutions, by the Central Bank of Nigeria (CBN), has swallowed the N31.6 billion deposited in the bank by MultiChoice.
Recall that the CBN on June 3, 2024, revoked the banking license of Heritage Bank leading to the closure of the financial institution.
The CBN appointed the Nigeria Deposit Insurance Corporation (NDIC) as Heritage Bank’s liquidator and the Corporation has since commenced the payment of the insured deposits of N5 million maximum per depositor.
However, in MultiChoice’s interim financial statements for the half-year ending September 30, 2024, the company said it has written off the 31.6 billion Naira deposited in Heritage Bank.
MultiChoice revealed that its decision to write off the funds was a result of the liquidation of the Bank which followed its closure.
The financial statement document read, “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 decried the effects of the Naira depreciation saying, “The further depreciation of the naira against the US dollar has resulted in further foreign exchange losses on non-quasi equity loans (on the USD-denominated intergroup loan from MultiChoice Africa Holdings B.V. to MultiChoice Nigeria Limited), contributing to the ZAR2.1bn (1H FY24: ZAR2.4bn) recognised in the condensed consolidated income statement.
MultiChoice in the statement also reported lower cash remittances from Nigeria during the period under review adding that the firm lost $1 million in the process.
The statement added, “The group extracted USD65m from Nigeria in the period (1H FY24: USD91m) at an average rate of NGN1,516:USD (1H FY24: NGN794:USD), incurring extraction losses of USD1m or ZAR20m (1H FY24: USD28m or ZAR518m) in the process.
“The group held USD11m in cash in Nigeria at period-end, down from USD39m 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weaker naira and the write-off of the USD21m receivable relating to the cash held with Heritage Bank before its license was revoked and the bank was liquidated,” the statement concluded.
Investors King reported that the managing director of NDIC, Bello Hassan, during a special day event in Lagos advised unpaid customers to visit the NDIC website, email, and social media platforms with their BVN, proof of account ownership, and alternative account details to claim their funds.
