Keybridge Capital has posted a $6.14 million loss for the half-year ended 31 December 2024, driven by legacy governance issues and significant legal costs. A new board, appointed following court intervention, is now focused on stabilising the company and pursuing recovery actions.
- Half-year loss of $6.14 million following prior governance failures
- Unsecured $4.95 million transfer to former director’s Italian entity fully impaired
- Ongoing legal proceedings and asset recovery efforts underway
- New board appointed by Supreme Court in February 2025
- Funding facility secured from Wilson Asset Management to support operations
Legacy Governance and Financial Impact
Keybridge Capital Limited (ASX: KBC) has revealed a significant half-year loss of $6.14 million for the period ending 31 December 2024. This result starkly contrasts with a profit of $8.65 million in the prior comparable period and reflects the financial consequences of legacy transactions and governance issues predating the appointment of the current board in early 2025.
The company’s financial statements disclose a material unsecured transfer of $4.95 million to an Italian entity associated with former director Mr Nicholas Bolton. These funds were used to acquire a waterfront residential property at Lake Como, Italy. The transfer, made without shareholder approval or documentation, was only disclosed months later and has since been fully impaired in the accounts. Legal proceedings to recover these funds are ongoing, with the NSW Supreme Court having frozen Mr Bolton’s Australian assets and applications underway to secure the Italian property.
Board Changes and Legal Battles
Following a tumultuous period marked by shareholder disputes and court interventions, a new board was appointed on 10 February 2025 by order of the Supreme Court of NSW. The directors who approved the recent financial statements were not involved in the company’s operations during the reporting period and have relied on existing records and external advice to prepare the accounts.
The company has faced substantial legal and financing costs related to legacy disputes, including indemnities provided to subsidiaries and litigation involving former management. These costs, alongside impairments on other loans receivable, some advanced without security or documentation, have further strained Keybridge’s financial position.
Liquidity and Funding Support
Keybridge’s liquidity was materially impacted by the Lake Como transfer and related legal expenses. To address these challenges, the new board secured a short-term funding facility from Wilson Asset Management, providing critical working capital to maintain operations and meet obligations. The company’s ongoing solvency depends on this facility’s continuation and successful realisation of assets, pending a planned recapitalisation.
Despite the impairments recognised, the company continues to pursue recovery of all amounts owed, which could positively influence future financial outcomes. However, ASIC has imposed fundraising restrictions on Keybridge due to late financial reporting, requiring full prospectuses for capital raises until at least August 2026, potentially increasing the cost and complexity of future fundraising efforts.
Outlook and Governance Reforms
The new board has taken decisive steps to stabilise Keybridge’s governance framework, financial controls, and shareholder relations. Multiple legal proceedings remain active, including recovery actions against former directors and disputes involving subsidiaries. The company also faces ongoing litigation related to prior management decisions and contractual claims.
Keybridge holds $8.46 million in its profit reserve and $7.96 million in franking credits, positioning it to potentially resume dividend payments once financial stability is restored. The board’s focus remains on restoring balance sheet strength, improving liquidity, and acting in shareholders’ best interests amid a complex legacy environment.
Bottom Line?
Keybridge’s path to recovery hinges on legal outcomes and funding continuity, with investors watching closely for signs of financial and governance stability.
Questions in the middle?
- Will Keybridge successfully recover the $4.95 million advanced for the Lake Como property?
- How will ASIC’s fundraising restrictions affect Keybridge’s ability to raise capital in the near term?
- What are the prospects for resolving ongoing litigation and restoring investor confidence?