KUALA LUMPUR (April 28): Catcha Digital Bhd (KL:CATCHA) on Monday proposed a rights issue to raise funds to finance acquisitions by the company and its subsidiaries.

In a filing with Bursa Malaysia, the company said the rights issue will involve the issuance of one new share for every four existing shares held

Additionally, shareholders who subscribe to the rights shares will be entitled to receive two free detachable warrants for every one rights share subscribed.

A total up to 90.12 million rights shares and up to 180.24 million warrants are proposed to be issued, the company said, adding that the issue price of the rights shares and the exercise price of the warrants will be determined at a later date

Based on an indicative rights issue price of 28 sen per share, the rights issue is expected to raise a minimum of RM11.51 million and a maximum of RM25.23 million.

Based on the maximum amount of RM25.23 million, the company said the proceeds will be allocated to partially fund the proposed acquisitions of Drive 2 Digital Sdn Bhd (19.81%), Theta Service Partner Sdn Bhd (22.72%), Framemotion Studio Sdn Bhd (21.8%), and DS Services Sdn Bhd (3.96%), as well as potential acquisitions (25.22%), working capital needs (3.39%), and estimated expenses for the corporate proposals (3.1%).

"These acquisitions are expected to be value-accretive and align with the company’s long-term growth strategy to expand its digital footprint and diversify its revenue streams," the company said.

Catcha Digital's shares rose by half a sen or 1.8% to close at 28.5 sen on Monday, bringing the company's market capitalisation to RM102.7 million. The stock has fallen 22.97% year-to-date.