KUALA LUMPUR (Sept 14): Pharmaniaga Bhd's appeal for a standalone second private placement of some RM50 million has been dismissed by Bursa Malaysia Securities, leading the company to include the private placement in its regularisation plan as a PN17 company, according to a filing with the stock exchange.

As part of its financial turnaround strategy, the pharmaceutical company is preparing a comprehensive regularisation plan, required by Bursa Malaysia’s main market listing.

This plan, expected to be submitted by the third quarter this year, will highlight the group’s efforts to regain financial stability and enhance shareholder value. Completion of this initiative is expected to be finalised by 1Q2024.

The pharmaceutical group booked a positive net operating cash flow of RM43.13 million in its latest six-months ended June 30, 2023, from negative net operating cash flow of RM135.78 million in the same period last year.

At end-June, it had borrowings of RM1.135 billion, against deposits, cash and bank balances of RM27.77 million.

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

The proceeds from the private placement is to be used as an interim measure to bridge the group's working capital requirement while the group formulates a plan to regularise its financial condition to address its PN17 status.

Pharmaniaga had previously raised RM45.86 million via its non-public offering on July 24, in which it placed 131.02 million new shares or 10% of its then share base. The funds raised were utilised for the company's working capital.

On July 27, Bursa Malaysia informed Pharmaniaga Bhd that it was "unable to consider" the company's proposed second private placement of new shares to the Armed Forces Fund Board (LTAT); instead the stock exchange recommended that the private placement integrated be part of the company’s proposed regularisation plan.

Shares of Pharmaniaga were up 1.5 sen or 3.23% at 48 sen on Thursday, giving the company a market capitalisation of RM691.79 million.