by RUPINDER SINGH
PHARMANIAGA Bhd’s proposed private placement II faced a setback as Bursa Securities rejected the proposal as a stand-alone basis. Instead, the stock exchange recommended that the second private placement be integrated into the company’s proposed regularisation plan.
The proposed private placement II was initiated by Pharmaniaga with the objective of raising additional capital to bridge its working capital requirements while formulating a plan to regularise its financial condition.
The second private placement, aimed to issue up to 144.12 million new ordinary shares, representing approximately 10% of the total number of issued shares of the company.
Pharmaniaga expected the private placement to generate gross proceeds of approximately RM 50 million.
However, Bursa Securities cited that an affected listed issuer’s primary obligation is to expedite financial regularisation and maintain its listing status.
Consequently, the private placement was considered a part of the broader regularisation plan to address the company’s financial challenges.
“The affected listed issuer must submit a regularisation plan to the Securities Commission Malaysia or Bursa Securities which is sufficiently comprehensive and enables the affected listed issuer to regularise its financial condition.
“In this respect, Bursa Securities is unable to consider the proposed private placement II as a second fund raising exercise on a stand-alone basis. Bursa Securities further indicated that the Proposed Private Placement II may be included as part of the company’s proposed regularisation plan.
“Premised on the above, Bursa Securities decided to return the additional listing application for the proposed private placement II, MIDF Investment told the bourse on behalf of the company today.
On June 13, 2023, Pharmaniaga proposed a private placement of up to 131.02 million new ordinary shares to raise approximately RM44.55 million in gross proceeds through the first placement..
On February 27 this year, Pharmaniaga slipped into the Practice Note 17 (PN17) status after incurring provisions of RM552.3 million for unsold Covid-19 vaccines, leading to negative equity in its balance sheet.
As a result, the company’s capital deficiency amounted to RM119.19 million, as disclosed in an earlier filing.
Pharmaniga shares fell by 2.5 sen or 5.43% to close at 43.5 sen today, translating toa market capitalisation of RM627 million.