MultiChoice Group, a leading entertainment provider in Africa, has confirmed the write-off of $21 million deposited in the now-defunct Heritage Bank.
The decision comes after several attempts to recover the funds proved unsuccessful following the bank’s collapse.
Heritage Bank, which faced regulatory scrutiny and financial instability, was officially declared insolvent recently by the industry regulator.
MultiChoice, known for its popular DStv and GOtv services, disclosed the loss in its latest financial report, citing it as an unfortunate but necessary accounting measure to reflect its true financial position.
The loss stems from Heritage Bank’s inability to fulfil its obligations due to its insolvency.
The bank had been under the supervision of the Nigeria Deposit Insurance Corporation (NDIC), which has since commenced the auction of the bank’s remaining assets to settle outstanding liabilities.
However, the proceeds from the asset sales were insufficient to cover the deposits of major creditors like MultiChoice.
Industry analysts view the write-off as a strategic move by MultiChoice to prevent prolonged litigation and focus on its core business operations.
Despite the financial setback, the company assured stakeholders of its resilience and ability to sustain growth.
MultiChoice has reiterated its commitment to its subscribers and shareholders, stating that the write-off will not affect its ongoing operations or future investments in Nigeria and other African markets.
The company stated in its report: “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weaker naira and the write-off of the USD21m receivable relating to the cash held with Heritage Bank before its license was revoked and the bank was liquidated.”
The firm also noted that Nigeria accounted for 63 per cent of the MultiChoice Group’s subscriber losses in its Rest of Africa segment since FY23.
The decline, largely driven by severe economic pressures including inflation and the weakening naira, highlights Nigeria’s substantial contribution to the overall reduction in the subscriber base.
From FY23 to 1H FY25, active subscribers in the Rest of Africa dropped significantly, with Nigeria showing a net loss of 1.1 million.
Multichoice Group, owners of DSTV, had earlier said that it had an account balance of N31.6bn with Heritage Bank, before the bank’s liquidation.
The group says it will continue to explore avenues for potential recovery of the funds while focusing on maintaining its leadership in the pay-TV industry.
