KUALA LUMPUR (July 21): Pharmaniaga Bhd has proposed to undertake a second private placement of up to 144.12 million new shares, representing 10% of its total issued shares, to the Armed Forces Fund Board (LTAT), subject to shareholders’ approval.

In a filing to Bursa Malaysia on Friday (July 21), the pharmaceutical group, which has booked negative net operating cash flow since 2020, said its largest shareholder LTAT confirmed that the subscription of the placement will be satisfied in cash at an issue price to be determined later.

Based on the indicative issue price of 35.6 sen and assuming 140.45 million shares being placed out, the placement is expected to raise gross proceeds of about RM50 million.

Pharmaniaga said the proceeds from the private placement will be used as interim measures to bridge its working capital requirements while it is formulating a plan to regularise its financial condition to address its Practice Note 17 status.

The plan is to be submitted to Bursa Securities within 12 months from Feb 27. Pharmaniaga expects to make the submission by the third quarter this year.

The group also needs to ensure there is adequate working capital for the continuation of medical supplies to the nation’s healthcare facilities.

In determining the issue price, Pharmaniaga said the board will take into consideration the prevailing market conditions, and discount of not more than 10% to the volume weighted average market price of Pharmaniaga shares for the five market days immediately preceding the price-fixing date.

The group had on June 13 undertook its first 10% private placement exercise that saw 131.02 million shares placed out to third-party investors.

“The success of the private share placement exercise shows the investors’ confidence in Pharmaniaga’s growth trajectory and strategic direction, signalling potential enhancement to the group’s financial stability. These investors that took up the first private placement shares were both from institutions and individuals,” the company said in a separate statement.

It added this new placement is set to allow the group to raise additional funds, supplementing the proceeds to be received from the first private share placement.