Llangollen Railway

Where is a millionaire (or at least somebody rich) when you need one?

Stu

 

Someone sent me the Receiver’s disposal list. I didn’t ask for it.

I hope I can get away with not copying and pasting it here in its entirety, but I think I'm alright to say that no track appears on the list.

 

Definitely looks like the LR will be a shadow of its former self for some time to come. Will Foxcote Manor ever return?

 

If it can earn higher fees working elsewhere than the new LR operating entity/trust can afford to pay, then not for a long time at least. Same can probably be said for 5199.

 

At least the Llangollen will re appear in some form, imagine how bad it would have been if everything stock, track, buildings, locos were owned by the PLC, there would be no coming back from that, at least some degree of public opening might be possible, We were always expecting, a major failure in the preservation world at some time, but I must admit, I never thought the LR would be the one that tipped into insolvency, my money was on another railway in Somerset being the most likily to go under.

 

I thought it was only a shortish term hire, a year or two to the WSR, with Llangollen remaining their home base?

Where is 6430 these days? Has it left Llangollen already?

 

Not sure about the Pannier, but Autocoach 167 is due to arrive at Chinnor soon.
https://twitter.com/ChinnorRailway/status/1372234700647972865

 

There will be assets that will be nice to have, but not essential*, & that could be easily replaced in the future. Better to let them go & concentrate on the essentials.

*(I'm thinking of most/all of the engineering stuff. It is likely to be easier to sell, so the receivers might do separate auctions giving more time for the Trust to raise funds)

 

They are fortunate to have the DMU group so running a service is not that difficult or requiring lots of hiring expense and a return to be a voluntary organisation like Gloucester and Warwick.

 

The PLC directors said "the balance sheet is now insolvent to the extent of £350,000" and "There is no prospect of meeting these liabilities, even over an extended period." It looks to me like more than selling some PLC coaches to assuage the bank.

Others on here will be better qualified to comment but I think the current method of insolvency is via Administration, at least initially, although the message has changed over the month:

Llangollen Railway PLC – Press release 1st March 2021 "the directors of Llangollen Railway PLC have had to take the reluctant step of inviting the bank to appoint a receiver."

Llangollen Railway Trust Ltd – Press release 16 March 2021 "Whilst the PLC will go into administration or liquidation shortly"

Website - "Alan Coleman and Jason Mark Elliott of Cowgill Holloway Business Recovery LLP have been formally engaged to assist the Directors with placing Llangollen Railway Plc into Administration."

Sales website - By Order of the Proposed Administrators

Patrick

 

What is the difference between receivership and administration? It would appear to suggest that things have got worse or am I reading too much into that?

 

Receivership is generally worse than administration.
https://www.businessrescueexpert.co.uk/difference-between-administration-and-receivership/

 

The factor here is the receiver. They are not obliged to do anything other than recover the value of the loan they advanced from the security pledged. Whether the "patient" lives or dies isn't their duty. This is good and bad. They don't have to kill the entity, but they don't have to not kill it. If they can see a way to get what they need without more disturbance then they will do. (hence my comments previously about getting a good price for assets).

In theory, a receiver could leave a going concern with no need for further insolvency. In reality, this never happens: why would the company have got that far behind if it didn't have to? But from there, the entity will need to appoint an IP who decides which way to go (but as noted, they are under a duty to consider administration first). It comes down to a vote amongst creditors

Receivership is a one-way street. It is the orderly distribution of assets.

Administration is something from which a going concern may be salvaged. With the accent on "may". Quite rightly, the insolvency laws aim to avoid businesses being wound-up unnecessarily, and IPs (Insolvency Professionals) are obliged to consider Administration before liquidation in all but hopeless cases. This can be just prolonging the agony.

If the entity is "only" £350k short, then the Receiver may be able to see a way to recover that with simple sales of movable property, and then the remaining creditors may see a future in keeping the business going.

To me, all that the sequence of announcements say is default on securitised loan, and that the business isn't definitely toast

 

10 or 15 Mk1s at maybe £20-£30k each, £350k could conceivably be reached. The problem is the Plc wouldn’t then have any coaches left to run the service.

 

Each case is different of course, but several historic railways have operated under receivership, often for years. On the Isle of Wight, the FY&NR benefitted from the experience of no less than Sir Sam Fay during it's receivership. Down Somerset way, the WC&PR came under the umbrella of the Col Stephens group of lines. In 1906, the NWNGR even named new flagship loco Russell after their receiver.

 

That is back in the mists of time, I don't think receivers nowadays have that power (certainly the Official Receiver only has 12 months to act). Also railways have different rules

 

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