PETALING JAYA: Independent auditor Messrs PricewaterhouseCoopers (PwC) PLT has reported a material uncertainty that may cast significant doubt on Pharmaniaga Bhd
’s ability to continue as a going concern.
In a filing with Bursa Malaysia, PwC noted the pharmaceutical group had incurred a net loss of RM605.1mil, in its audit of Pharmaniaga’s financial statements for the financial year ended Dec 31, 2022 (FY22).
The group’s current liabilities exceeded its current assets by RM632.1mil and the company’s current liabilities exceeded its current assets by RM411.2mil.
Moreover, the auditor also stated Pharmaniaga recorded a capital deficiency of RM227.4mil as at Dec 31, 2022.
“These events or conditions indicate that a material uncertainty exists that may cast significant doubt on the group’s and the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter,” PwC said in a statement yesterday.
Earlier this year, Pharmaniaga slipped into the PN17 category, for companies that are in financial distress, due to a RM552mil impairment the company had incurred on Covid-19 vaccines. This came about because of the slow demand for Covid-19 vaccines following the country's move to the endemic phase.
Last month, Defence Minister Datuk Seri Mohamad Hasan said Pharmaniaga is expected to announce its regularisation plan to Bursa Malaysia in August. He also said the group has appointed a new lineup of executives, and MIDF Amanah Investment Bank Bhd as its principal adviser to draw up the regularisation plan.
Last week, Pharmaniaga executive committee chairman Ahmad Shahredzuan Mohd Shariff said the company’s strategic plan includes targeted initiatives aimed at streamlining business activities, optimising overall business operations and costs, as well as finding synergies across all business units.
The group anticipates the negotiation process for its concession renewal to be concluded soon and the renewal decision to be made before the end of June 2023.
At the same time, the group announced a private placement of up to 131.02 million new ordinary shares representing 10% of its total issued shares. Pharmaniaga said it plans to utilise the proceeds to settle outstanding payments owed to suppliers and trade creditors.
This proposed private placement is expected to improve the liquidity and financial flexibility of Pharmaniaga by strengthening its capital base and financial position while waiting for the regularisation plan to be finalised, added PwC.
Boustead Holdings Bhd is Pharmaniaga’s largest shareholder, owning a 52% stake. Boustead is being taken private by the Armed Forces Fund (LTAT), which now controls a 97.63% stake in the conglomerate.
