Faritec is looking to raise R20-million in order to ensure the business's sustainability.
In a statement to shareholders yesterday afternoon, the company advised that the board has resolved to undertake an underwritten rights offer to shareholders
in order to raise R20-million.
It says that, "to ensure the sustainability of the business over the long term, Faritec requires a capital injection.
"This is necessary to fund the short-term working capital requirements of the business as well as the significant cost-cutting exercise which has been implemented."
The capital will come from two sources: R20-million from shareholders; and R10-million to R15-million through the release of cash which currently underpins various guarantees.
"This capital injection should provide a secure and sustainable platform for future operations," the company states.
In terms of the rights offer, Faritec shareholders will be offered 77.46 shares for every 100 shares held by them on the record date for participation in the rights offer. The subscription price will be 10 cents per rights offer share.