KUALA LUMPUR (Feb 5): mTouche Technology Bhd is raising fresh capital of up to RM79.44 million via a cash call to finance its diversification into the distribution and sale of Covid-19 test kits.

Meanwhile, it also proposed an extension of time frame for the utilisation of the remaining proceeds raised from the rights issue exercise that was completed in November, 2017.

mTouche, in which AirAsia co-founder Datuk Kamarudin Meranun holds a 5.17% stake, has proposed a rights issue which comes with free detachable warrants after the proposed 10-to-one share consolidation exercise.    

The renounceable rights issue of up to 794.37 million new shares will be on the basis of six rights shares with three free warrant-D for every existing consolidated share held.

mTouche has set a minimum of RM10 million to be raised from the proposed rights Issue.

To meet the minimum subscription level, the company has procured written undertakings from its executive directors Tang Boon Koon and Chen Huei Ping.

Under the minimum scenario, Tang's and Chen's shareholdings in the company will rise to 21.94% from 0.04% respectively, assuming none of the other entitled shareholders subscribe for their right shares.

mTouche, which is principally involved in the provision of mobile value-added services for smartphones, said it had reported losses for the past two financial years ended June 30, 2019 (FY19) and FY20 mainly due to increasing competition in the mobile value-added services industries arising from new developments in mobile technologies.

Thus, the group plans to diversify into the healthcare business which includes the distribution and sale of Covid-19 test kits and the wellness business to improve its financial performance.

The group also said following its share consolidation, its number of shares will be reduced to 128.15 million from 1.28 billion.

Meanwhile, the gross proceeds to be raised from the proposed rights issue with warrants will be utilised for the expansion of the distribution and sale of test kits business, funding of the wellness business and working capital.

mtouche closed 0.5 sen or 10% higher at 5.5 sen, valuing the company at RM72.81 million.