corporate

Pharmaniaga drops free warrants from tweaked regularisation plan

KUALA LUMPUR: Pharmaniaga Bhd has announced that its upcoming rights issue will proceed without the issuance of free detachable warrants, focusing solely on offering rights shares to shareholders.

In a filing to Bursa Malaysia today, the group said the terms for the rights shares remain unchanged from previous announcements.

The rights issue is expected to involve up to 1.68 billion shares, based on an enlarged issued share capital of approximately 1.47 billion shares, assuming all outstanding options totaling about 31.75 million shares as of the last practicable date (LPD) are exercised.

The issuance follows an illustrative entitlement ratio of eight rights shares for every seven existing shares, with an indicative issue price of RM0.21 per rights share.

Furthermore, Pharmaniaga also said its proposed capital reduction will entail the reduction and cancellation of RM520.0 million of the issued share capital of Pharmaniaga.

As at the LPD, the issued share capital of Pharmaniaga is RM200.0 million comprising1,44 billion Pharmaniaga shares.

The proposed capital reduction is to be implemented after the completion of the proposed rights issue and proposed private placement.

"The free detachable warrants have been excluded from the proposed regularisation plan to mitigate the dilution of potential future earnings of Pharmaniaga." "In addition, the board expects that the issue price to be fixed for the rights shares shall suffice to incentivise the entitled shareholders to subscribe for their respective entitlements to the rights shares," the group said.

Pharmaniaga also noted that the sequence of the proposed regularisation plan has been amended to further reduce the consolidated accumulated losses of Pharmaniaga post the implementation of the proposed regularisation plan.

It said as a result of the change in sequence of implementation of the proposals Pharmaniaga would be in a better position to issue dividends in the future, as and when appropriate, following the reduction of accumulated losses.

Pharmaniaga was trading at 37.5 sen a share earlier, giving it a market capitalisation of RM540.5 million.

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