KUALA LUMPUR: Practice Note 17 (PN17) Pharmaniaga Bhd's wholly-owned unit, Pharmaniaga Logistics Sdn Bhd (PLSB) has entered into a seven-year concession agreement (CA) with the Health Ministry to procure, store, supply and deliver medical products to offices and facilities operated and controlled by the ministry in Malaysia.
In a filing to Bursa Malaysia, the company said the CA will serve as a platform for the company to support the nation in logistics and distribution of medical products to the public sector.
"It will also provide the company with another income stream which will contribute to the profitability of the company," it noted.
Under the terms, the CA takes effect retrospectively from July 1, 2023 and remain in force for a period of seven years until June 30, 2030 subject to earlier termination.
The CA is expected to contribute positively to the future earnings and earnings per share of Pharmaniaga for the next seven years.
Pharmaniaga has two months to file applications with regards to its regularisation plan announced on Nov 30, 2023.
Under the plan, Pharmaniaga plans to raise up to RM655mil to shore up its finances and exit its PN17 status.
Its plans include a proposed capital reduction, rights issue with warrants and private placement.
Pharmaniaga's share price opened 10.67 per cent higher at 41.5 sen on the concession agreement win after midday break. Some 5.7 million shares changed hands.