First Capital calls in the company doctors

The funds management and property finance group, Rockstead Financial Services, has appointed administrators to its subsidiary First Capital Securities.

Rockstead, an ASX-listed company, announced yesterday that First Capital had appointed Greg Moloney and Peter Geroff of Ferrier Hodgson to take over its affairs.

As a consequence the Public Trustee of Queensland, pursuant to a charge over First Capital for the benefit of unsecured note holders, appointed Deloitte as receivers and managers.

Ferrier Hodgson partner Greg Moloney said in a statement that the single charge holder, the Public Trustee of Queensland, represented more than 500 unsecured note holders. There are also a small number of unsecured creditors.

Rockstead has not had administrators appointed to it.

According to Rockstead's financial statement for the six months to December, the company made a loss of $2.2 million. It had current liabilities of $30.1 million, including unsecured notes of $15.8 million and loans of $11.8 million. The unsecured notes were issued by First Capital.

The company's auditor Moore Stephens included the following qualification in the financial statement: "There is uncertainty whether the company and its controlled subsidiaries will be able to continue as a going concern and therefore whether it will be able to realise its assets and extinguish its liabilities in the normal course of business."

The company is in the middle of a turnaround. Formerly First Capital Group, it was refinanced in 2007 with a $3 million investment from Rockstead Venture Capital, part of the Singapore group Rockstead Capital.

It made a loss of $12.9 million in the 2006/07 year and reported several non-recurring expenses relating to legal disputes in the December half.

The company had stopped issuing debentures in May 2007 and was in the process of winding down its debenture book.

Rockstead also announced yesterday that a New Zealand subsidiary, First Capital Gulf Harbour, had been unable to refinance a $15.3 million loan from Strategic Finance, the Allco subsidiary.