Bursa Malaysia has rejected Pharmaniaga Bhd’s appeal for a second standalone private placement proposal due to the company’s financial distress.
In a filing to Bursa Malaysia, Pharmaniaga, classified under Practice Note 17 (PN17), disclosed that its appeal submitted on August 1, 2023, was dismissed by Bursa Malaysia in a letter dated September 13, 2023.
As a result of this dismissal, Pharmaniaga is now considering incorporating the private placement exercise into its regularisation plan, as per Paragraph 8.04(3) of the Main Market Listing Requirements of Bursa Securities.
The move aligns with Bursa Malaysia’s stance, communicated in a letter dated July 26, 2023, that as a PN17 company, Pharmaniaga should include the private placement as part of its proposed regularisation plan, which the company had not yet submitted at that time.
Pharmaniaga’s initial proposal for the second private placement aimed to issue up to 144.12 million new shares, equivalent to 10% of the company’s total issued shares, to the Armed Forces Fund Board (LTAT).
The objective was to generate gross proceeds of up to RM50 million.
The funds were intended to serve as an interim solution to meet the company’s working capital needs while it devised a plan to rectify its financial situation and address its PN17 status.
The proposal followed a prior private placement of 131.02 million new shares, or 10% of the company’s then share base, completed on July 24.
The earlier placement had raised RM45.86 million, primarily to support Pharmaniaga’s working capital requirements.
Bursa Securities had previously informed Pharmaniaga that, as a PN17 company, it needed to swiftly regularise its financial condition to justify continued trading on the exchange.
Pharmaniaga entered PN17 status in February, triggered by provisions of RM552.3 million for unsold Covid-19 vaccines, resulting in a negative equity position on its balance sheet.
The company reported a capital deficiency of RM119.19 million in an earlier filing.
Shares of Pharmaniaga closed up 1.5 sen or 3.23% to 48 sen today, giving the company a market capitalisation of RM92 million.
Source: The Malaysian Reserve