Llangollen Railway

There are about two dozen Mk 1s on the line, plus a number of DMUs, so they could just about still a two train service even if all the PLC-owned Mk1s were to be lost None of the suburban coaches, for example, seem to be Plc-owned, and I'm pretty sure that not all of the corridor ones are.

 

Where has this number of coaches suddenly appeared from?

 

In these Covid restricted times the 4 (shortly to be 5) Mk1 suburbans are likely to be of more use than the numerous TSO's that the Plc owns. I'd be more concerned that the Trust can acquire the small amount of Plc owned track and the equipment necessary to operate the railway and maintain the remaining locos/stock.
ISTR reading, on the unofficial LR page, that the Trustees were drawing up a priority list of potential purchases. I sincerely hope that sufficient donations are made so that the Trust isn't forced into selling any of their 3 locos.
Ray.

 

I daresay there's a distinct line to be drawn between railways as a public utility (has any such railway gone into receivership since the Transport Act of 1947? The recent only case I can think of was the Lough Swilly, in semi-detached NI a few years back and that was a railway company which had run no trains since 1953 and IIRC operated within the legal purview of the RoI anyway) and attractions which merely happen to be railways, operating in the leisure sector, but if I'm reading the runes correctly, the onus on receivers is to achieve the optimum outcome for creditors.

Whilst obvious that various assets are now going to be disposed of (a deliberately open choice of wording), acting in a manner which precludes any future for the LR in any form can't automatically be assumed from the legal responsibilities of the receivers, There are significant "other parties" with a vested interest in a viable future for the line.

 

Just a guesstimate from looking at the carriage survey and filtering on Llangollen:

http://www.cs.rhrp.org.uk/se/search.asp

Assuming that most of the Mk1s are Plc owned other than the surburbans.

Anyway who has had access to the sales list might be able to enlighten us further.

 

When Bikermike describes the entity as "only" being £350,000 short that is the amount they owe exceeds the value of what they own. If you sell X MK1s at their fair value for £350,000 then they are still £350,000 short. All they have done is reduced fixed assets by £350,000 and increased cash by the same amount. If they then repay some of the creditors they remain £350,000 short just that now they have £350,000 less assets inc cash and £350,000 less creditors.

The only way you narrow the gap is if assets are sold for more than they have been valued at, you have a form of income, somebody gifts some money/assets or some of the creditors are written off.

It looks a pretty bleak position as with the Plc having gone bang is obviously going to impact people's view on whatever organisation takes over abilities to pay. Will lenders be willing to lend to help get up and running again, if they need to hire a loco in would the owners want paying in advance. I have a soft spot for the line as it was starting up when I was at school in the area and I may have ended up volunteering there if we had not moved.

Based on the statements that the trust is "debt free" the trust must have had a decent year or so of fund raising as at 31 December 2019 it had net current liabilities of £94K. It obviously had a load of fixed assets as well. At 31.12.19 the trust owed the Plc 92K, had cash in the bank of £53k and an overdraft of £48k. Unless the overdraft was interest free I am not sure why thy had such a large overdraft when there were funds in the bank. If the trust has reversed that position it is obviously good as it would have had to raise a fair lump if it had to repay the Plc what it at the end of 2019 and then acquire assets of the Plc.

I have a soft spot for the line as it was starting up when I was at school in the area and I may have ended up volunteering there if we had not moved.

 

The asset list is subject to a non disclosure agreement. https://www.lsh.co.uk/assetadvisory/private-treaty/llangollen-railway-plc---pt

 

When Railtrack went under the letterheading became 'Railtrack (in Railway Administration)'. Which implies that there was a specific process invoked. But LR is not an utility, so who knows?
Pat

 

Was Railtrack actually a comparable case? In that case, IIRC the company was intentionally manouvered into a course of action resulting insolvency by action of the then government. That, at least, was the charge levelled at the Transport Secretary at the time.

 

Also, are the plc actually a railway company? If the Trust holds the LRO and operates the trains, then the plc are just a ticketing agency/events company and engineering firm...

 

In the run-up to administration I don't think there is any parallel. DafT was playing games with Railtrack (not that we should shed any tears for it). It was the implied special nature of 'Railway Administration' that I was drawing attention to.
Pat

 

Now there's a thought.
Pat

 

Wrong to like this Martin, but I’m in total agreement

 

Getting away from the legals. What business case suggested that running to Corwen as opposed to being content at Glyndyfrdwy would produce a larger surplus? Love the railway but Llangollen station is a basket case that needs constant attention and a drain on resources. Us enthusiasts drive to wherever to enjoy our sport, but to expect punters to drive to Llangollen then sit on an expensive train to Corwen which with respect to the locals is no Whitby, Swanage or Kingswear.

 

To be fair though, what heritage railway extension has ever been built with a sound business case and expectation of making a surplus?

 

Bewdley to Kidderminster?

 

Toddington to Broadway?

 

Even if the LR is saved, the new operation in whatever form needs to earn money to progress out of this mess. There’s a reason why their in this situation (I know not what that reason is), what’s to say that after a rescue they don’t slip into the same situation again in 12-24 months?

They'll need to borrow, or have some very generous donors donate significant sums to get back to anything close to what they had.