The South African Pay-TV operator, Multichoice Group, said it has written off the N31.6 billion ($21 million) cash it had with the recently liquidated Heritage Bank.
The Group disclosed this in its results for the six months ended September 30, 2024.
The Group had earlier in its annual report for FY 2024 released in June reported a deposit of N33.7 billion with the bank as of the 2024 fiscal year end on March 31, 2024.
However, that balance was subsequently reduced to N31.6 billion due to cash remittances before the bank’s liquidation on June 3, 2024.
“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,” Multichoice stated in a note to the $21 million listed as part of its operating losses for the half-year under review.
Loss to Naira depreciation
- The Group reported that further depreciation of the naira against the US dollar 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).
- However, despite the headwinds, the Group was able to repatriate some funds to headquarters from the Nigerian operation, though lower than it did in 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 (1H FY24: NGN794:USD), 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 the 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naira and the write-off of the USD21 million receivable relating to the cash held with Heritage Bank before its license was revoked and the bank was liquidated,” it stated.
What you should know
Following the revocation of Heritage Bank’s banking license by the Central Bank of Nigeria (CBN) on June 3, 2024, the Nigeria Deposit Insurance Corporation (NDIC) was appointed as liquidator and the Corporation has since commenced the payment of the insured deposits of N5 million maximum per depositor.
- Although Multichoice in June said it would engage the NDIC to “ensure a reasonable outcome is achieved” over its money in the liquidated bank, its deposit is far beyond the maximum amount guaranteed by the NDIC.
- However, the NDIC recently announced that it was working assiduously to ensure that all depositors with amounts in excess of the maximum insured amount of N5 million are paid through liquidation dividends from the realisation of the defunct bank’s assets.
- The Corporation said it has already initiated the process of debt recovery and realization of investments and physical assets of the defunct bank to ensure timely reimbursement of the uninsured depositors of the defunct bank.
