Prism Holdings has announced the details of its rights offer aimed at raising R34.85 million.
The group plans to use the money to satisfy its working capital requirements and repay a portion of its banking liabilities.
About 290.41 million shares are to be issued at 12c each on the basis of 100 new shares for every 100 Prism shares held.
This compares with the share`s closing price of 16c on Friday.
The last day to trade for the rights offer in order to settle by the record date and to qualify to participate in the offer is 17 January.
The rights offer is to open on 27 January and closes on 14 February.
The offer is being underwritten by The Archway Technology Venture Capital Fund, Horizon Equity Partners, Standard Corporate & Merchant Bank, Tomori Enterprises and a management consortium.
Prism had planned to reduce its debt and enhance working capital by selling Prism TranSwitch Services to Allied Technologies (Altech) for R47 million.
However, although the parties had signed heads of agreement in October, they announced last month that talks had been scrapped.
The negotiations ended as a result of what Prism CEO Alvin Els described as irreconcilable positions, a change in Prism`s trading position and concerns over intellectual property rights.
Prism decided to continue with its recapitalisation process in the form of the rights offer, which is intended to provide the foundation for the group`s refinancing.
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