PETALING JAYA, Pharmaniaga Bhd’s shares plunged 16% on Tuesday, despite the completion of two key corporate exercises aimed at steering the pharmaceutical group out of its Practice Note 17 (PN17) status.
Bursa Malaysia Securities granted Pharmaniaga a three-month extension to Aug 29 to implement its PN17 regularisation plan.
The stock fell 3.5 sen to 18 sen, hitting its intra-day low and ending the day with a market capitalisation of RM883 million. It was also one of the most actively traded counters, with 51.8 million shares changing hands.
The sharp drop came after the company made two Bursa Malaysia filings earlier in the day, detailing the completion of its rights issue and private placement exercises—both central components of its PN17 regularisation plan.
In May, Bursa Malaysia granted Pharmaniaga a three-month extension until Aug 29 to implement its regularisation strategy. The plan includes a RM520 million capital reduction, along with the two equity-raising exercises.
Pharmaniaga fell into PN17 status in February 2023 after recording a massive impairment loss due to unsold RM552 million worth of Covid-19 vaccines. This resulted in its largest-ever quarterly net loss of RM664.39 million in Q4 FY2022.
Based on current figures, the two completed exercises are expected to raise a total of approximately RM569.5 million, helping to stabilise the group’s financial position. This falls within the company’s previous guidance of raising between RM560.9 million and RM641.4 million.
However, the exercises are highly dilutive, adding 5.1 billion new shares to Pharmaniaga’s share base. The company confirmed that the new shares will be listed on July 31, a likely reason for today’s share price decline.
The rights issue involved the issuance of 3.45 billion new shares at 10 sen each, raising an estimated RM345.9 million. Initially, the company had proposed up to 3.52 billion rights shares, on the basis of 12 rights shares for every five existing shares.
In addition, Pharmaniaga placed 1.65 billion shares with third-party investors at 13.5 sen per share, generating about RM223.6 million. The placement was done at a 6.6% discount to the five-day volume-weighted average price of 14.46 sen as of June 16.
While today’s filings did not disclose the identities of the placement investors, The Edge weekly previously reported that Jakel Group, Great Eastern, Koperasi Angkatan Tentera Malaysia Bhd, and shipping magnate Halim Mohammad were among the interested parties, according to sources.
