KUALA LUMPUR: Pharmaniaga Bhd, one of Malaysia's largest integrated pharmaceutical groups aims to exit its Practice Note 17 (PN17) status by March 2025, according to managing director Zulkifli Jafar.
He said that the company anticipates approval of its regularisation plan from Bursa Malaysia by next month.
The process is expected to take three to four months, Zulkifli said after launching the company's biopharmaceutical plant in Puchong, Selangor yesterday.
"So we are looking at (a PN17 exit) in the first quarter of 2025," he added.
The company triggered the PN17 criteria on Feb 27, 2023, following an audit of its consolidated financial statements for the period ended Dec 31, 2022 (FY2022).
Pharmaniaga posted a net loss of RM607.32 million for FY2022 against a net profit of RM172.15 million in the previous year.
A massive impairment caused by its failure to offload RM552.3 million worth of Covid-19 vaccines sent Pharmaniaga tumbling into PN17 status on Feb 27, 2023.
Revenue fell 27.1 per cent to RM3.51 billion from RM4.82 billion as there was lower demand from the government for the purchase of Covid-19 vaccines.
The company submitted its regularisation plan to Bursa Malaysia in February 2024 in hope of exiting the PN17 classification.
The plan outlines a holistic approach to increase the equity of the company and minimise its accumulated losses.
It involves fund raising via a renounceable rights issue of new ordinary shares of up to RM354.6 million and private placement of up to RM300 million. The plan also entails a capital reduction of about RM180 million issued share capital to reduce its accumulated losses.
According to the company's filing to Bursa Malaysia in February, its substantial shareholders, the Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd (BHB), are supporting this strategic initiative. Pharmaniaga is a subsidiary of BHB, which in turn is wholly owned by LTAT.
According to sources, exiting PN17 status will be a significant milestone for Pharmaniaga as it seeks to expand its footprint in the biopharmaceutical sector by establishing manufacturing facilities for vaccines and insulin.
"The company is aiming to diversify its revenue streams and anticipates securing more contracts from both the government and private sectors. It is also investing in four new warehouses as part of a RM220 million capital expenditure plan, designed to fulfill the requirements of its government concession to supply drugs and non-drug products to government facilities nationwide."