KUALA LUMPUR (Nov 29): Bursa Malaysia has approved Practice Note 17 (PN17) company Pharmaniaga Bhd’s (KL:PHARMA) regularisation plan, which was revised to adjust its capital reduction and exclude warrants from its rights issue, exactly a year after the initial iteration was announced.

The regularisation plan, which comprises a RM520 million capital reduction, a rights issue to raise up to RM353.52 million and a RM300 million proposed private placement, was approved by the bourse operator on Friday, according to the generic drug maker’s bourse filing.

The plan is still pending shareholder approval at a general meeting to be announced later.

“With this latest development, we are now fully focused on executing the regularisation plan and achieving a swift exit from PN17,” said Pharmaniaga managing director Zulkilfli Jafar in a statement.

Compared to the initial iteration announced in November 2023, the revised regularisation plan has an increased quantum of capital reduction of RM520 million — compared to RM180 million previously — and excludes free warrants previously proposed to accompany the rights issue.

Pharmaniaga’s largest shareholder is Boustead Holdings Bhd with a 47.12% stake, followed by Lembaga Tabung Angkatan Tentera (LTAT) with 7.83%. LTAT took Boustead private last year in a move to restructure the conglomerate.

Under the rights issue, Boustead will need to fork out RM166.58 million and LTAT RM27.68 million to fully subscribe to their respective entitlements, based on back-of-the-envelope calculations.

The rights issue and private placement exercises are to occur prior to the capital reduction. Pharmaniaga's share capital currently stands at RM200.04 million and may rise up to RM879.18 million post-rights issue and private placement before being slashed to RM359.18 million after the capital reduction.

Of the potential RM653.52 million in total proceeds expected to be raised from both cash calls, RM335 million (51.3%) is earmarked for debt repayment, RM222 million (33.9%) for business expansion, RM87.61 million (13.4%) for working capital and RM8.9 million (1.4%) to defray the plan’s expenses.

At end-September, Pharmaniaga had negative equity reserves of RM374.96 million, mainly on accumulated losses of RM473.88 million.

The drug maker fell into PN17 status in February last year amid massive impairment after being unable to sell RM552.3 million worth of Covid-19 vaccines.

For the nine months ended Sept 30, 2024, Pharmaniaga posted a net profit of RM129.48 million on a revenue of RM2.83 billion.

Shares in Pharmaniaga ended 2.5 sen or 6.25% lower at 37.5 sen, giving the group a market capitalisation of RM503.77 million.
 
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