IT Capital's engine bet backfires

By PAUL PANCKHURST

Troubled technology investor IT Capital's two bets for growth were boats with wheels and an Auckland inventor's "radial electric engine".

Looks like it is down to the boats with wheels.

The listed company yesterday told the Stock Exchange that it could not agree on terms for funding Peter Parsonage's fledgling Conceptual Solutionz, the company with the electric engine.

IT Capital chairman John Robertson said: "We are extremely disappointed with this outcome."

IT Capital had money available, but "we are not prepared to extend funding unless we can reach terms that are commercially sound".

Parsonage was wary of talking about the areas of dispute, "because I'm being threatened with litigation".

IT Capital's chief executive, David McKee Wright, and one of its directors, Maurice Bryham, had a 50 per cent stake in Conceptual Solutionz.

McKee Wright said the pair sold the stake to IT Capital for an undisclosed sum and were paid in IT Capital shares.

They were now willing for that deal to be unwound and the shares cancelled, leaving the pair once more sitting alongside Parsonage as shareholders. The final word on that would come from IT Capital's board.

Shareholders' Association chairman Bruce Sheppard, a past critic of IT Capital deals, called yesterday's announcement "great news".

In July, Sheppard raised questions over the amounts to be paid for unproven companies, which led to a scaling-back of IT Capital's plans for raising capital and buying assets from McKee Wright and Bryham.

In the end, the company raised $2.1 million and said it would buy 50 per cent of Conceptual Solutionz and 70 per cent of another McKee Wright/Bryham-linked company, Sealegs International.

It has been a troubled year for the company, which was described as teetering on the brink of liquidation during its struggle to refinance.

But last month IT Capital announced the sale of new media company Terabyte Interactive in what McKee Wright called "the finish of our reconstruction".

That left the company's stake in computer screen developer Deep Video Imaging as the only big investment remaining from when McKee Wright and Bryham were brought in to run the firm.

A minority shareholding in Australian web tools company Golden Orb had been written down to zero.

Conceptual Solutionz was one of the company's two growth prospects.

Now, it seems, there is just one: Sealegs International and its self-launching inflatables with retractable motorised wheels.

IT Capital shares closed down 0.8c yesterday at 3c.