Virtual network operator Flexiroam (ASX:FRX) is set to raise up to AU$3.9 million via a non-renounceable, pro-rata entitlement offer on the basis of one new share for every one share held priced at AU$0.005 apiece, according to a Wednesday filing with the Australian bourse.

Eligible shareholders will also have the opportunity to apply for new shares for which applications are not received under the entitlement offer shortfall, the filing said.

Proceeds will be used for the repayment of loan obligations and working capital, according to the filing.

Flexiroam's shares plummeted 30% in afternoon trade Wednesday.