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No decision yet on Pharmaniaga’s regularisation plan, says Ahmad Nazim

Publish date: Tue, 14 Mar 2023, 09:13 AM

KUALA LUMPUR (March 13): There is no decision yet on Pharmaniaga Bhd's regularisation plan, said Boustead Holdings Bhd’s non-independent and non-executive chairman Datuk Ahmad Nazim Abdul Rahman.

Ahmad Nazim, who is also the chief executive of Lembaga Tabung Angkatan Tentera (LTAT), said Bursa Securities has given the pharmaceutical firm a deadline of six to 12 months to come up with a regularisation plan.

“The next step will depend on the best strategy. We have to think of whether there will be an M&A [for Pharmaniaga], or continue with the current listed entity,” he told The Edge on Monday (March 13).

Pharmaniaga is 52%-owned by Boustead, which in turn is 59.42%-owned by LTAT. LTAT also has a direct 8.6% interest in Pharmaniaga.

Last month, Pharmaniaga announced that it had fallen under the Practice Note 17 (PN17) classification for financially distressed companies after posting its largest ever quarterly net loss of RM664.39 million in the fourth quarter ended Dec 31, 2022 (4QFY2022), compared with a net profit of RM85.47 million in 4QFY2021.

The pharmaceutical firm had taken a RM552.3 million impairment on unsold Covid-19 vaccines and written down the goodwill of its Indonesian manufacturing cash-generating units of RM50.3 million.

Pharmaniaga’s largest quarterly loss also dragged Boustead into the red with a quarterly net loss of RM402.3 million in 4QFY2022 - its largest quarterly loss since 4QFY2019. In comparison, Boustead made a net profit of RM78.6 million in 4QFY2021.

“I think we just have to accept that the vaccine impairment is already done,” Ahmad Nazim said when asked what led to the massive impairment and who is to blame for it.

“What is more important for us is to address Pharmaniaga’s PN17 issue and improve its [Pharmaniaga's] balance sheet. There is no point in going back to the past,” he added.

Pharmaniaga’s balance sheet as at Dec 31, 2022, shows that its short-term borrowings, which would be due within six months, ballooned to RM968.27 million from RM570.05 million a year ago. Its long-term borrowings amounted to RM190.6 million, down from RM285.17 million previously.

Notably, its receivables increased to RM351.66 million as at end-2022, from RM297.75 million a year ago; its cash balance was at RM52.84 million, while its inventory dropped to RM767.26 million from RM1.26 billion after the impairment.

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