KUALA LUMPUR (June 14): Practice Note 17 (PN17) company Pharmaniaga Bhd clarified that a significant portion of its proposed private placement proceeds has been earmarked for payments to its suppliers and trade creditors.
In a filing to Bursa Malaysia on Wednesday (June 14), the group said some RM44.21 million raised from the fund-raising exercise has been allocated for the group’s working capital purposes, specifically for payment to suppliers and trade creditors.
Pharmaniaga, which has booked negative net operating cash flow since 2020, intends to issue up to 131.02 million shares for the placement, with an indicative price of 34 sen per share or RM44.54 million.
The amount was allocated primarily for its working capital, while the remaining RM336,000 are the estimated expenses of the exercise, according to its Tuesday (June 13) filing.
The placement shares will be issued to third party investors to be identified later, Pharmaniaga said in its filing.
Last month, BP Healthcare Group confirmed to The Edge that it has expressed its interest in Pharmaniaga. The latter is understood to have received several proposals from interested parties looking to take a stake and participate in the pharmaceutical company’s restructuring, The Edge weekly reported.
The company fell into the PN17 status in February this year, after booking provisions of RM552.3 million for unsold Covid-19 vaccines which resulted in negative equity in its balance sheet. Its capital deficiency stood at RM119.19 million, according to its earlier filing.
At end-March, it had trade payables of RM722.3 million against cash and bank balances of RM56.6 million.
Pharmaniaga’s largest shareholder is Boustead Holdings Bhd with a 52% stake. Boustead is being taken private by the Armed Forces Fund (LTAT), which controls a 97.63% stake in the conglomerate.
At noon break, its share price fell to one sen or 2.63% at 37 sen, valuing the company at RM484.74 million.