KUALA LUMPUR (June 20): Independent auditor Messrs PricewaterhouseCoopers (PwC) PLT has reported a material uncertainty that may cast significant doubt on Pharmaniaga Bhd’s ability to continue as a going concern.

PwC, in its audit of Pharmaniaga’s financial statements for the financial year ended Dec 31, 2022 (FY2022), indicated that the group’s current liabilities exceeded its current assets by RM632.1 million while the company’s current liabilities exceeded its current assets by RM411.2 million.

The group also recorded a capital deficiency of RM227.4 million as at end-December, according to the auditor.

“These events or conditions indicate that a material uncertainty exists that may cast significant doubt on the group’s and the Company’s ability to continue as a going concern,” said PwC in Pharmaniaga's filing on Tuesday (June 20).

Pharmaniaga expects to resolve issues related to the material uncertainty surrounding its ability to continue as a going concern by the second quarter of 2024.

The group, which slipped to Practice Note 17 (PN17) status in February after being hit by RM552 million impairment on Covid-19 vaccines, is in the midst of formulating its regularisation plan.

Pharmaniaga is expected to announce the plan to Bursa Malaysia in August, Defence Minister Datuk Seri Mohamad Hasan said last month.

Last week, the group announced a private placement of up to 10% of its total issued shares to raise up to RM44.54 million for working capital, particularly for payments to suppliers and trade creditors.

As at end-March, its short term debts stood at RM1.03 billion. It had receivables of RM552.4 million and payables of RM881.1 million.

Pharmaniaga’s largest shareholder is Boustead Holdings Bhd, which owns a 52% stake. Boustead is being taken private by the Armed Forces Fund (LTAT), which controls a 97.63% stake in the conglomerate.

On Tuesday, Pharmaniaga’s share price closed flat at 37 sen, giving it a market capitalisation of RM478.23 million.