Saturday 02 Dec 2023
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KUALA LUMPUR (Nov 21): Business process outsourcing solutions provider Advance Information Marketing Bhd (AIM) has proposed a rights issue to raise funds for its new pharmacy business activity.

In a bourse filing, the group said the rights issues of up to 319.27 million shares will come after the consolidation of every three existing shares into one share.

It added that three rights shares will be issued for every one consolidated share, together with up to 212.85 million free detachable warrants on the basis of two warrants for every three rights shares.

The group said the issue price of the rights shares will be determined later, but it expects to raise gross proceeds of between RM5 million and RM31.93 million, comprising mainly of start-up costs for the pharmacy business and working capital.

IM said the group has been registering losses for the financial year ended Dec 31, 2019 (FY19), FY20 and FY21 of between RM3.80 million and RM5.16 million, and has been actively identifying other business opportunities to expand its revenue stream, to mitigate the loss-making position and to reduce dependence on its existing sources of revenue.

On Oct 6, the group announced that its wholly-owned subsidiary Advance Medipharm Solutions Sdn Bhd had entered into an agreement with Mediconstant Holdings Sdn Bhd (MHSB) for the purpose of obtaining the rights and franchise to operate Constant Pharmacy outlets.

AIM said it is planning to open up to 10 pharmacy outlets within 12 months from the completion date of the proposed rights issue, depending on the actual amount of proceeds to be raised.

“With the increased number of pharmacy outlets and the resultant increase in the group’s orders for inventory, the group may negotiate for better pricing or volume discounts for its inventories,” it said.

AIM said it expects demand for pharmaceutical, healthcare and personal care products to continue to grow, mainly due to increased general public’s awareness on self-protection and the importance of practising personal hygiene in their daily lives after the Covid-19 outbreak.

“The company expects that its future participation in the pharmacy business may result in the diversion of 25% or more of the net assets of [the] AIM group, or may result in a contribution to 25% or more of the net profits of the group,” it added.

AIM’s share price ended unchanged at 11 sen on Monday (Nov 21), bringing the group a market capitalisation of RM29.3 million.

Edited ByS Kanagaraju
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