Lynton and Barnstaple - Operations and Development

Did you mean "is it not better"?

 

Indeed I did - oops - edited now - thanks.
It's often the smallest words which cause trouble...like when I say 'no' to my wife rather than 'yes'

 

I always say 'yes' to my wife, sometimes followed by the word 'dear'.

 

Small update on Trust Notices section of the website - https://www.lynton-rail.co.uk/trust-notices

 

It's good that they have made provision for electronic voting for overseas members.

 

It is, though there's a bit of "better late than never" mixed with a concerning lack of provision for such a ballot in the M&As.

This election should be seen as a necessary evil, because all of the alternatives are worse. But this is a wholly avoidable situation that should never have been near contemplation.

 

True, but the phrase "be thankful for small mercies" comes to mind, AND the trustees have acknowledged the overseas
members' difficulties in previous elections.

 

I completely agree - my comment was that these are mitigations in a situation that itself should never have arisen.

 

Following a mention of the LBBC Company and Companies House, which Company Mr Smith says in the screed he's a Director of, I looked at the Companies House website. Indeed, his directorship has not been registered. Mr Cowling is registered (twice) and Mr Miles as directors. The site says the Company is dormant, and the identity of the Secretary is not mentioned that I could see. The accounts to 31 December show cash at bank and in hand of £1,567K. - maybe a suggestion as to how much was paid for the business (but, of course, maybe not be directly related to the price about to be paid). There is also a loan due for repayment after a year of £394K. The 1921 accounts call it dormant but these call it 'filleted accounts'. A new phrase on me, maybe meaning abbreviated, unless it should say filed accounts. The charges register says £580K has been borrowed from someone in Taunton, at 2 1/2% above Lloyds bank rate or 6% whichever is the lower. If 6% that means nearly £35K pa payable in interest. More worryingly, if I am reading the document correctly, the loan can be demanded back at 6 months notice by the lender. Imagine if a new source could not be found to repay the amount, would the Trust be obliged as a shareholder legally, morally, or to save the site, to bail it out ? I am hoping someone will tell me that my concerns are mis-placed. I am not a LBBC shareholder. - maybe one of those can put me right.

 

I understand that the loan capped at 6% is from Michael Grimoldby, a CIC Director, @Michael B . But it is fully secured on the assets of the LBBC, and since the Trust put in £200k or so into LBBC in the form of B Shares which are by their nature unsecured, someone should explain why the Trust accepted a much riskier position for its money than someone who happens to be a CIC Director.

I don't blame Mr Grimoldby for accepting this deal - it's very attractive. But it begs the question who else was offered this deal by Mr Cowling, and how it was decided that 6% was the appropriate price?

 

The rates quoted for the loan seem pretty unexceptional business loan numbers to me. The company got a very attractive rate to get it capped at 6%.

 

no it means fillited, which is what most companies that meet the threshold file at the moment, although this may change

https://www.unbiased.co.uk/discover...erence-between-abridged-and-filleted-accounts

I'm surprised you are looking at the 1921 accounts

A six month notice period on a loan is not onerous, many loans are theoretically repayable on demand.

 

That's not my point @21B - the three questions I'd like answered are

(i) Who else was asked for a loan, to provide some competition on rate? Or was it a special deal for one individual?
(ii) How was 6% agreed in the absence of this?
(iii) Why didn't the Trust secure an equally good deal for its own investment?

 

It certainly was dormant then!

 

I'm sorry about that - I'm an amateur historian, often working on the 1920s, but not as far back as a certain MP seems to be. Of course, I meant 2021.

On a related subject, did we get confirmation that the Parracombe Appeal had raised '£700,000 by the end of January' (quote from the Railway Magazine) ? Only the accounts at 31 December have a fund of £221K, so an awful lot of money must have come in in January. A legacy, perhaps ? Now that the fund is closed and Plan C is to be pursued it would be helpful to know how much the fund now has in it.

 

Indeed. But it raises some significant questions about the fundraising progress that such an onerous loan term was considered necessary. 6 months is not long to put an alternative in place.

 

Base rate plus 2 1/2% or 6% whichever is lower, would not fit my definition of onerous. Ymmv.

 

I think the whole issue of OSHI needs to be questioned from a Trust members point of view. As I have said in the past I am not impressed at the level of fund raising that is taking place that this project requires to succeed.

Six months is so short it makes me wonder just how much the trustees knew about Blackmoor before this came to light. I would suggest that what is needed is a complete review of the fundraising strategy.

It is not good enough to try and build this railway on a hand to mouth basis. We need to raise a substantial amount of capital, but to do that it will take time. Which I do wonder if this project has got that much left.

 

In general, I would agree. For this purchase, my use of onerous relates to the challenge of filling the gap if, for any reason, the loan were terminated.

As a friendly loan, that strongly suggests that a loan on commercial terms would have been difficult (was?) to obtain.


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The 6% is reported as being a cap, a maximum rate. Given current base and bank rates this looks to me to be a pretty good deal for the company. The sort of thing that would only come from someone well disposed to the organisation. The premium above Lloyds is well within the normal range of commercial deals, in fact I would say at the cheaper end. I would be surprised if better terms could be secured commercially.