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Thursday 26 Mar 2026 [](https://theedgemalaysia.com/askedge/) BURSA SGX 1. [Home](https://theedgemalaysia.com/) [Edge Weekly](https://theedgemalaysia.com/flash-categories/Edge%20Weekly)  This article first appeared in The Edge Malaysia Weekly on April 7, 2025 - April 13, 2025 MOHAMMAD Ashraf Md Radzi, the chief executive of Lembaga Tabung Angkatan Tentera (LTAT), sees Pharmaniaga Bhd (KL:[PHARMA](https://theedgemalaysia.com/askedge/klse/7081)) as one of the few gems the pension fund has in its stable. LTAT owns a 54.9% stake in the company, with some 47.12% of it held via Boustead Holdings Bhd. The maker of generic drugs got into financial trouble after failing to sell RM552.3 million worth of Sinovac Covid-19 vaccines that it had stocked up during the pandemic. But if Ashraf is to be believed, Pharmaniaga’s old wounds will heal soon, after which the company will be able to fire up new growth engines at home and abroad, in Indonesia. The CEO, who has helmed LTAT for a year, admitted that the unsold vaccines taught the company an “extremely painful lesson”. Still, he is confident Pharmaniaga will be able to raise enough fresh funds by the end of June. By then, Pharmaniaga’s accumulated losses of RM371.3 million (as at end-2024) would have been wiped off by a capital reduction exercise, positioning itself for a Practice Note 17 exit by the end of the year. Apart from a renounceable rights issue with free warrants to raise RM353.5 million from existing shareholders, Pharmaniaga plans to place out 2.14 billion new shares, equivalent to 30.4% of its enlarged share base. [](https://myassets.theedgemalaysia.com/pics/2025/CS-Pharmaniaga-1-TEM1569-theedgemalaysia_20250410193130.jpg) In a nutshell, the group is raising RM635.5 million, nearly double its existing market capitalisation of RM338.7 million. Some RM335 million of the funds raised will be used to pay off debt while RM222 million has been earmarked for business expansion — RM130 million for four new warehouses for concession-related activities and RM92 million for product development of vaccines, insulin and other generic drugs. LTAT and its wholly-owned company Boustead Holdings have given an undertaking that they will take up any unsubscribed rights shares. “We are prepared to do so because we believe in the potential of Pharmaniaga to come out of this in a big way,” Ashraf tells The Edge in an interview. He says there is a “healthy interest” in Pharmaniaga’s share placement, which is expected to attract RM300 million of fresh capital from third parties. “Without sounding too forward about it, I believe there is a book size beyond one time already,” says the former investment banker when asked about the interest in the share placement. “Appetite \[for the private placement\] is both local and international. So, in a way, there is \[interest from\] pharmaceutical and non-pharmaceutical.” Last year, Pharmaniaga managing director Zulkifli Jaafar had said the share placement had seen interest from “Chinese or Indian parties”. ### Emergence of a substantial shareholder? The sizeable private placement will dilute LTAT’s stake in Pharmaniaga from 54.9% to 38.3%, assuming it manages to place out 2.14 billion shares and an outstanding 31.75 million options are not exercised. It is apparent that the fundraising will pave the way for the entry of a new substantial shareholder, or several of them, in Pharmaniaga. “We do have a grand plan for the company, of which regularisation is an important part. This is where we want new partners that are interested in being there for the long run to help grow the company,” says Ashraf. While acknowledging the stake dilution, Ashraf assures that LTAT will remain the company’s single largest shareholder. “We are at risk of dilution, but I think it will not be a case where we are diluted beyond the single largest shareholder. “There are a few options available to us should we wish to pursue keeping our combined majority stake; this will be ironed out in the next few months.” He reveals that LTAT or Boustead is required to remain either the single largest shareholder or have majority control over Pharmaniaga simply because there is a restriction on changes in shareholders given the latter is a concessionaire to supply generic drugs to public hospitals. Pharmaniaga’s concession was renewed in January 2024, retrospectively taking effect from July 1, 2023, with a seven-year tenure to supply medicine to public hospitals after a hot debate on breaking up the monopoly. The concession is strictly for the logistics and distribution of an approved products purchase list. ### Renewed domestic biopharma manufacturing push Ashraf underlines the concession’s “razor-thin margins” and notes that it is high time for the pharmaceutical company to develop its non-concession operations. “It has been attempted but not executed well enough before. But now, especially with the liquids, biopharmaceuticals, it presents a good opportunity for us to position ourselves as a partner to the Ministry of Health to provide security of supply.” On a positive note, he says the lesson learnt from the painful Covid-19 vaccine episode is that Pharmaniaga cultivated the expertise and know-how of handling fill-and-finishing, opening the door for the company to manufacture and supply insulin and vaccines in the domestic market. “And I think when it comes to the government managing the fiscal burden, supplying pharmaceuticals to local hospitals and even private hospitals, we need to transition from branded drugs to generics. We need the cost efficiency to be better by producing some drugs that are worthwhile locally. “I think once we exit PN17 status, insulin will come online this year and vaccines next year. There’s a lot more growth to pursue when it comes to non-concession income and manufacturing capacity for the security of domestic supply,” Ashraf says. Pharmaniaga has an insulin and vaccine plant that cost RM280 million to RM300 million and was completed at the end of 2023. Once Pharmaniaga’s house is in order in Malaysia, Ashraf says it will turn its attention to growing its presence in Indonesia. At the present time, Pharmaniaga has operations in Indonesia via 73%-owned listed pharmaceutical distributor PT Millennium Pharmacon International Tbk and 96%-controlled generic drug manufacturer PT Errita Pharma. In the financial year ended Dec 31, 2024 (FY2024), the Indonesian operations contributed 31.3% to Pharmaniaga’s revenue. ### Earnings on recovery path Pharmaniaga returned to the black in FY2024 with a net profit of RM131.82 million after it had bled red ink for two years. It posted a net loss of RM80.16 million in FY2023 and RM629.92 million in FY2022 when it booked massive impairment. Revenue grew 10% to RM3.76 billion in FY2024 from RM3.4 billion a year earlier. The company’s annual profit was attributed to increased demand in its concession segment as well as the reversal of penalty charges from the government. According to a Feb 19, 2025 circular on Pharmaniaga’s regularisation plan, the government’s waiver of penalty amounted to a post-tax reversal of RM94.9 million, equivalent to nearly 72% of Pharmaniaga’s profit. The penalty imposed related to the delivery of drugs during the pandemic, during which time the company, along with all supply chain players, was impacted by global movement restrictions and supply delays. Considering these factors, the government agreed to waive the penalty. Pharmaniaga had a debt-laden balance sheet with accumulated losses of RM471.41 million as at the end of 2024. Its total borrowings amounted to RM1.18 billion, of which RM1.06 billion were current liabilities. Its cash and cash equivalents stood at RM152.2 million. Due to the large accumulated losses, the company has a negative shareholders’ equity of RM171.28 million. Operating cash flow was positive at RM42.67 million in FY2024, albeit down from RM46.95 million in FY2023. The vaccine bungle will soon be a thing of the past for Pharmaniaga, should it manage to execute its regularisation scheme as planned. Post-regularisation plan, a pro forma net gearing of 2.33 times is expected when computed on audited FY2023 figures, according to Pharmaniaga’s circular on its regularisation plan. Nonetheless, the investing public will be watching it with a keen eye on the emergence of new substantial shareholders given LTAT’s experience in restructuring Boustead Plantations Bhd. Save by [subscribing](https://subscribe.theedgemalaysia.com/) to us for your print and/or digital copy. **P/S: The Edge is also available on [Apple's App Store](https://itunes.apple.com/us/app/the-edge-markets/id990567068?ls=1&mt=8) and [Android's Google Play](https://play.google.com/store/apps/details?id=com.bizedge.theedgemarkets.malaysia).** - Most Read - Just In Copyright © 1999-2026 The Edge Communications Sdn. Bhd. 199301012242 (266980-X). All rights reserved  Print  Text Size  Share

This article first appeared in The Edge Malaysia Weekly on April 7, 2025 - April 13, 2025 MOHAMMAD Ashraf Md Radzi, the chief executive of Lembaga Tabung Angkatan Tentera (LTAT), sees Pharmaniaga Bhd (KL:[PHARMA](https://theedgemalaysia.com/askedge/klse/7081)) as one of the few gems the pension fund has in its stable. LTAT owns a 54.9% stake in the company, with some 47.12% of it held via Boustead Holdings Bhd. The maker of generic drugs got into financial trouble after failing to sell RM552.3 million worth of Sinovac Covid-19 vaccines that it had stocked up during the pandemic. But if Ashraf is to be believed, Pharmaniaga’s old wounds will heal soon, after which the company will be able to fire up new growth engines at home and abroad, in Indonesia. The CEO, who has helmed LTAT for a year, admitted that the unsold vaccines taught the company an “extremely painful lesson”. Still, he is confident Pharmaniaga will be able to raise enough fresh funds by the end of June. By then, Pharmaniaga’s accumulated losses of RM371.3 million (as at end-2024) would have been wiped off by a capital reduction exercise, positioning itself for a Practice Note 17 exit by the end of the year. Apart from a renounceable rights issue with free warrants to raise RM353.5 million from existing shareholders, Pharmaniaga plans to place out 2.14 billion new shares, equivalent to 30.4% of its enlarged share base. [](https://myassets.theedgemalaysia.com/pics/2025/CS-Pharmaniaga-1-TEM1569-theedgemalaysia_20250410193130.jpg) In a nutshell, the group is raising RM635.5 million, nearly double its existing market capitalisation of RM338.7 million. Some RM335 million of the funds raised will be used to pay off debt while RM222 million has been earmarked for business expansion — RM130 million for four new warehouses for concession-related activities and RM92 million for product development of vaccines, insulin and other generic drugs. LTAT and its wholly-owned company Boustead Holdings have given an undertaking that they will take up any unsubscribed rights shares. “We are prepared to do so because we believe in the potential of Pharmaniaga to come out of this in a big way,” Ashraf tells The Edge in an interview. He says there is a “healthy interest” in Pharmaniaga’s share placement, which is expected to attract RM300 million of fresh capital from third parties. “Without sounding too forward about it, I believe there is a book size beyond one time already,” says the former investment banker when asked about the interest in the share placement. “Appetite \[for the private placement\] is both local and international. So, in a way, there is \[interest from\] pharmaceutical and non-pharmaceutical.” Last year, Pharmaniaga managing director Zulkifli Jaafar had said the share placement had seen interest from “Chinese or Indian parties”. ### Emergence of a substantial shareholder? The sizeable private placement will dilute LTAT’s stake in Pharmaniaga from 54.9% to 38.3%, assuming it manages to place out 2.14 billion shares and an outstanding 31.75 million options are not exercised. It is apparent that the fundraising will pave the way for the entry of a new substantial shareholder, or several of them, in Pharmaniaga. “We do have a grand plan for the company, of which regularisation is an important part. This is where we want new partners that are interested in being there for the long run to help grow the company,” says Ashraf. While acknowledging the stake dilution, Ashraf assures that LTAT will remain the company’s single largest shareholder. “We are at risk of dilution, but I think it will not be a case where we are diluted beyond the single largest shareholder. “There are a few options available to us should we wish to pursue keeping our combined majority stake; this will be ironed out in the next few months.” He reveals that LTAT or Boustead is required to remain either the single largest shareholder or have majority control over Pharmaniaga simply because there is a restriction on changes in shareholders given the latter is a concessionaire to supply generic drugs to public hospitals. Pharmaniaga’s concession was renewed in January 2024, retrospectively taking effect from July 1, 2023, with a seven-year tenure to supply medicine to public hospitals after a hot debate on breaking up the monopoly. The concession is strictly for the logistics and distribution of an approved products purchase list. ### Renewed domestic biopharma manufacturing push Ashraf underlines the concession’s “razor-thin margins” and notes that it is high time for the pharmaceutical company to develop its non-concession operations. “It has been attempted but not executed well enough before. But now, especially with the liquids, biopharmaceuticals, it presents a good opportunity for us to position ourselves as a partner to the Ministry of Health to provide security of supply.” On a positive note, he says the lesson learnt from the painful Covid-19 vaccine episode is that Pharmaniaga cultivated the expertise and know-how of handling fill-and-finishing, opening the door for the company to manufacture and supply insulin and vaccines in the domestic market. “And I think when it comes to the government managing the fiscal burden, supplying pharmaceuticals to local hospitals and even private hospitals, we need to transition from branded drugs to generics. We need the cost efficiency to be better by producing some drugs that are worthwhile locally. “I think once we exit PN17 status, insulin will come online this year and vaccines next year. There’s a lot more growth to pursue when it comes to non-concession income and manufacturing capacity for the security of domestic supply,” Ashraf says. Pharmaniaga has an insulin and vaccine plant that cost RM280 million to RM300 million and was completed at the end of 2023. Once Pharmaniaga’s house is in order in Malaysia, Ashraf says it will turn its attention to growing its presence in Indonesia. At the present time, Pharmaniaga has operations in Indonesia via 73%-owned listed pharmaceutical distributor PT Millennium Pharmacon International Tbk and 96%-controlled generic drug manufacturer PT Errita Pharma. In the financial year ended Dec 31, 2024 (FY2024), the Indonesian operations contributed 31.3% to Pharmaniaga’s revenue. ### Earnings on recovery path Pharmaniaga returned to the black in FY2024 with a net profit of RM131.82 million after it had bled red ink for two years. It posted a net loss of RM80.16 million in FY2023 and RM629.92 million in FY2022 when it booked massive impairment. Revenue grew 10% to RM3.76 billion in FY2024 from RM3.4 billion a year earlier. The company’s annual profit was attributed to increased demand in its concession segment as well as the reversal of penalty charges from the government. According to a Feb 19, 2025 circular on Pharmaniaga’s regularisation plan, the government’s waiver of penalty amounted to a post-tax reversal of RM94.9 million, equivalent to nearly 72% of Pharmaniaga’s profit. The penalty imposed related to the delivery of drugs during the pandemic, during which time the company, along with all supply chain players, was impacted by global movement restrictions and supply delays. Considering these factors, the government agreed to waive the penalty. Pharmaniaga had a debt-laden balance sheet with accumulated losses of RM471.41 million as at the end of 2024. Its total borrowings amounted to RM1.18 billion, of which RM1.06 billion were current liabilities. Its cash and cash equivalents stood at RM152.2 million. Due to the large accumulated losses, the company has a negative shareholders’ equity of RM171.28 million. Operating cash flow was positive at RM42.67 million in FY2024, albeit down from RM46.95 million in FY2023. The vaccine bungle will soon be a thing of the past for Pharmaniaga, should it manage to execute its regularisation scheme as planned. Post-regularisation plan, a pro forma net gearing of 2.33 times is expected when computed on audited FY2023 figures, according to Pharmaniaga’s circular on its regularisation plan. Nonetheless, the investing public will be watching it with a keen eye on the emergence of new substantial shareholders given LTAT’s experience in restructuring Boustead Plantations Bhd. Save by [subscribing](https://subscribe.theedgemalaysia.com/) to us for your print and/or digital copy. **P/S: The Edge is also available on [Apple's App Store](https://itunes.apple.com/us/app/the-edge-markets/id990567068?ls=1&mt=8) and [Android's Google Play](https://play.google.com/store/apps/details?id=com.bizedge.theedgemarkets.malaysia).**