Pharmaniaga proposes to undertake private placement of 131.02 million shares

KUALA LUMPUR: Pharmaniaga Bhd has proposed to undertake a private placement of up to 131.02 million new ordinary shares representing 10 per cent of its total issued shares to third-party investors to be identified later and at an issue price to be determined.

The company said the exercise shall be undertaken in accordance with the general mandate pursuant to Sections 75 and 76 of the Companies Act 2016 which were approved by its shareholders at its 25th Annual General Meeting held on June 12, 2023.

In a filing to Bursa Malaysia today, the company noted that in addition, any increase in the number of issued shares arising from the exercise of any options granted under the existing employees’ share option scheme of the company will not affect the maximum number of placement shares to be issued.

In determining the issue price, Pharmaniaga said the board will take into consideration the prevailing market conditions, and provisions of Paragraph 6.04(a) of the Main Market Listing Requirements (MMLR) of Bursa Securities Malaysia Bhd.

The provision stipulates that the issue price shall not be priced at more than a 10 per cent discount to the volume-weighted average market price (VWAMP) of Pharmaniaga shares for the five market days immediately preceding the price-fixing date.

For illustration purposes, based on the five-day VWAMP of the shares up to and including the latest practicable date of RM0.3772, the indicative issue price will be RM0.34 per placement share, representing a discount of 3.72 sen or 9.86 per cent to the five-day VWAMP.

Based on the indicative issue price of RM0.34, the proposed private placement is expected to raise gross proceeds of about RM44.55 million, out of which RM44.21 million are intended to be utilised for working capital and RM336,000 will be used to defray estimated expenses.

Pharmaniaga shared that the actual proceeds to be raised from the exercise are dependent on the actual number of placement shares to be issued and the issue price.

"Pending the utilisation of proceeds from the proposed private placement as and when they may be utilised, the unutilised proceeds shall be placed in interest-bearing deposits and/or money market financial instruments. Any interest income earned from such deposits will be used as working capital of the group,” it noted.

The company also noted that on Feb 27, 2023, it had triggered the prescribed criteria pursuant to Paragraph 2.1(a) of Practice Note 17 (PN17) of the MMLR.

The proposed exercise would enable the company to raise funds while it is formulating a plan to regularise its financial condition which is to be submitted to Bursa Malaysia Securities within 12 months from Feb 27, 2023.

"After due consideration of the various methods of fundraising, such as rights issue and bank borrowings, the Board is of the opinion that the proposed private placement is the most appropriate avenue of fundraising at this juncture,” it added. - Bernama