Shareholders should participate in the rights issue that is part of a recapitalisation proposal put forward by Bravura Solutions, Morningstar analyst James Cooper said.

His recommendation is to accumulate Bravura shares at $0.16 or less, while the rights issue would price the shares at $0.15.

But Cooper emphasised it would be a high-risk investment given Bravura's ambitious growth targets, the inherent risk associated with software development and low earnings visibility. 

An independent expert report filed with the Australian Securities Exchange earlier this week concluded that Bravura's recapitalisation proposal is not fair as it undervalues the company.

Deloitte Corporate Finance, which acted as the independent expert, estimated Bravura fully diluted shares are worth $0.20 to $0.31 after the proposed rights issue, instead of the proposed $0.15.

But Deloitte also said the issue is the only option currently available to raise money and keep the company from defaulting on its loan obligations, which are due to mature in August this year.

Therefore, Deloitte said the proposal should be considered as reasonable.

"The value that [Deloitte] has come up with is about right, but you can't get to the value if you don't have the capital [to repay debts]," Cooper said.

A failure to meet debt obligations could see Bravura lose the intellectual property rights to its software, which would have dire consequences for the share price, Deloitte said.

The board of Bravura has therefore decided to support the proposal and recommends that shareholders do the same.

The rights issue is fully underwritten by private equity company Ironbridge.