MultiChoice Writes Off $21m Deposit in Nigeria's Crashed Bank

Multinational cable broadcast conglomerate, MultiChoice, owners of DSTV and GOtv, has written off the sum of $21m it deposited at the Heritage Bank following the liquidation of the financial institution.

The write-off, said to be an indication of the unstable economy and worsening business environment in the country, is in addition to the inability of the South African company's low remittances from Nigeria.

Rather than the $91m it remitted last year, it came short with $26m in 2024. The company's woes are said to be further compounded by the fluctuating Naira to Dollar exchange rate which has taken its losses to new heights.

“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.

“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weaker naira and the write-off of the USD21m receivable relating to the cash held with Heritage Bank before its license was revoked and the bank was liquidated.” 

MultiChoice also pointed out that among others, Nigeria accounted for 63 per cent of its subscriber losses in the continent since the 2023 financial year. The downward slide, it noted, emanated mainly from severe economic pressures, including inflation and weakening Naira, all of which highlight Nigeria’s substantial contribution to the overall weakening of the subscriber base.

The company noted that the loss is from the initial N31.6bn balance it had in an account with the bank prior to its liquidation. 

MultiChoice also pointed out that it struggled with attempts to secure its subscriber base over the period. According to the company, active subscriber in the rest of the continent slid down with a net loss of $1.1m between Financial Year 2023 to the fist half of the 2025 Financial Year.

Meanwhile, the Nigeria Deposit Insurance Corporation, NDIC, has concluded plans to sell off all properties and assets belonging to the defunct bank in order to recover funds for uninsured depositors.

The exercise, involving competitive bidding for its landed properties and chattels across the country, is scheduled to take off on December 4, 2024.