Pharmaniaga tumbles 16% after wrapping up corporate exercises
PETALING JAYA : Pharmaniaga Bhd's shares fell 16% today even as it wrapped two key corporate proposals crucial to lifting the pharmaceutical group from its Practice Note 17 (PN17) classification.
Its shares fell 3.5 sen to close at its intra-day low of 18 sen, giving it a market capitalisation of RM883 million. It was the 11th most actively traded stock with 51.8 million shares changing hands.
The only major developments today were two bourse filings by the company providing further details on its rights issue and private placement proposals.
In May, Bursa Malaysia Securities granted Pharmaniaga a three-month extension to Aug 29 to implement its PN17 regularisation plan, which comprises a RM520 million capital reduction, a rights issue, and a private placement.
A massive impairment caused by its failure to offload RM552 million worth of Covid-19 vaccines sent Pharmaniaga tumbling into PN17 status in February 2023.
The impairment led to its largest ever quarterly net loss of RM664.39 million for Q4 FY2022.
A back-of-the-envelope calculation indicates the two corporate exercises raised a total of RM569.5 million, which will help to regularise the group's financial condition.
Pharmaniaga previously estimated total gross proceeds to be raised from the rights issue and private placement at a minimum of RM560.9 million to a maximum of RM641.4 million.
However, these exercises are also highly dilutive with about 5.1 billion new shares added to the share base. Today's announcements confirmed the new shares will be listed on July 31, which may explain the drop in the share price today.
Pharmaniaga previously unveiled a renounceable rights issue of up to 3.52 billion shares at 10 sen per share on the basis of 12 rights shares for every five existing shares.
Today's filing revealed 3.45 billion new shares were issued at the completion of the exercise, raising an estimated RM345.9 million.
The company also confirmed the placement to 'third-party investors' resulted in the issuance of 1.65 billion new shares at 13.5 sen per share, raising some RM223.6 million.
The placement shares were at a 6.6% discount based on the five-day volume-weighted average market price of Pharmaniaga shares of 14.46 sen as at June 16.
Today's announcement did not provide details on who the third-party investors were.
However, a recent report in The Edge weekly said textile wholesaler and retailer Jakel Group, Great Eastern, Koperasi Angkatan Tentera Malaysia Bhd, and shipping tycoon Halim Mohammad, were parties interested in taking up the placement shares, according to sources.
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Sapura Energy's final push
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The O&M segment, meanwhile, has also seen a turnaround, with Ebitda surging to RM144mil in FY25 from RM23mil in the previous year. 'It's a steady business. Last year, it turned the corner — Ebitda grew more than six times. Today, they're actually growing.' Sapura Energy's target is to grow the O&M segment into a billion-ringgit revenue contributor, with gradual expansion across South-East Asia. Over the years, Zamri said the company has shifted its strategic focus towards the Eastern Hemisphere in a bid to de-risk its operations and build on regional familiarity. 'Our concentration now — both in the bid book and order book — is very heavily skewed towards the Eastern Hemisphere. This was a conscious decision we made in the past couple of years. We're essentially hunkering down and focusing on geographies we know well, and where we've been actively operating,' he said. As at April 30, Sapura Energy's order book stood at RM7.9bil, with 78% or RM6.2bil from the Eastern Hemisphere. Of the total orderbook, 49% is from the drilling segment, followed by E&C at 28%, and O&M at 23%. These figures exclude RM4.8bil in orderbook under its joint ventures (JVs) and associates, particularly the Seabras Sapura JV in Brazil with Paratus Energy Services Ltd, where Sapura Energy holds a 50% stake. Zamri said the order book would be progressively recognised with 40% slated for FY26, 22% in FY27, and the remainder in FY28 and beyond. 'That JV has always been healthy and continues to be a very significant contributor to the group. While we only recognise our share of profit, they remain an important part of our overall portfolio,' he added. On tenderbook, Zamri said the group's active bids currently total RM29.9bil, with 81% or RM24.1bil also concentrated in the Eastern Hemisphere. 'Despite the challenges we face — limited working capital, fundraising constraints — our order book has consistently stayed above RM6bil (excluding JVs) over the past five years. This remains a viable and sustainable business,' he said. For the first quarter ended April 30, 2025 (1Q26), Sapura Energy's topline dropped to RM801.37mil from RM1.18bil in 1Q25. Bottomline slipped into the red, recording a net loss of RM477.96mil from a net profit of RM82.13mil in the previous corresponding quarter. Zamri said Sapura Energy's first quarter was marked by a typically slow period, impacted by seasonal and structural factors. 'One of the challenges is that clients are only just starting their business plans for the year, so contract awards have been slow. We're also coming out of the monsoon season, which limits mobilisation and offshore activity,' he said. He added that a project in Angola had also weighed on performance due to a mismatch between cost and revenue. 'We're making progress. By progress, I mean we are spending money. Some variation orders have yet to be formalised, and we're in active discussions with the client to reflect those changes.' Sapura Energy has no plans to re-enter the exploration and production (E&P) space in the near term, despite Zamri's own E&P background. Instead, the company is eyeing two adjacencies – asset decommissioning — through its Kita Solutions JV — and renewable energy, particularly engineering services for carbon capture, utilisation and storage (CCUS). Addressing the oil price cycle, Zamri noted that Sapura is less sensitive to short-term swings. 'Our clients make decisions based on long-term oil price scenarios. Investment will continue because energy demand continues to grow.' Operationally, Zamri said the company now focuses on discipline and margin preservation over chasing revenue growth. 'We're no longer aiming to be a giant like before,' Zamri said. 'We're taking baby steps. It's now a margin game, not just top line.' 'Can we grow back to the giant we were before? The real question is: do we want to?' he added. Chief restructuring officer Andy Chew Seng Heng acknowledged the role of the corporate debt restructuring committee (CDRC) in securing a balanced deal. 'Through CDRC mediation, we had a bigger voice to sell our story. In the end, figures speak for themselves — in liquidation, lenders would've gotten less than 30%. With this plan, they're getting well over 60%, plus equity, 'Chew said. Ganesh added if that scenario [liquidation] happens, the shareholder basically gets nothing. Concluding the interview, Zamri underscored the importance of shareholder backing, noting that it would reinforce the company's ability to move forward with greater confidence. 'Please, stand up at the EGM and vote in favour of the plan. The stronger the support, the stronger we move forward.'
