Selling Steam Loco shares

Apologies if this is in the wrong place, but it's something that's come up in conversation a few times among my time in the heritage scene and no one really knows the answer.

Cut a long story short, I have a share in a locomotive that was bought for me when I was 13. I'm now pushing 32 and thinking of selling said share to invest in a project closer to home.

Does anyone know of a process involved or have transferred shares in the past? Any light shed on this would be greatly appreciated.

thanks!

 

I'm pretty sure that most 'shares' are little more than a donation to a cause, they might give you a vote on livery or location, but usually don't actually transfer any part of ownership of the loco.

I stand to be corrected by those more knowledgeable...


Keith

 

there are those on the wsra thread who argue otherwise, but most would agree a minor number of shares will hold little value.

 

Au contraire, my share in Southern Locomotives represents a share in my ownership of the company. As such, if I were to transfer that share, so would my infinitesimally small share of ownership be transferred.

I also, just to be clear, have zero expectation that if I were to wish to do so, I would receive any monetary value for that share. As @ghost says, the payment for the share is effectively a donation to the cause, and it would frankly be better use of someone's money to purchase a new share as that would provide capital to the cause, rather than to me.

The only two circumstances in which I might expect to receive something for my share would be in the event that the company was wound up, or (per WSRA/4160) where there was a proposed takeover of the company, in which case there might either be leftover assets or a premium be paid (not per WSRA...) for the transfer of control. I will not be factoring either situation into my pension planning.

So,unfortunately, @Azrall, I very much doubt that your share has any realisable value for the project you wish to support.

 

The first question I would ask is whether they are indeed shares in the normal sense of the word i.e. a participation in the share capital of a company. Fund raising in the heritage sector is often presented in a rather informal way (to be polite) and it is not always clear what is being offered. If they are indeed shares, the next question is whether it is a private or a public company (and I am assuming it is a company incorporated in England). A public company normally has "plc" after the name, although it is more likely to be a private company. The procedure for transfer, and restrictions on transfer, will be in the articles of association - these should be available on the Companies House website if you do not already have a copy. The restrictions may include an absolute right for the directors to refuse a transfer, and may include a pre-emption right i.e. you would have to give existing shareholders the right to buy at the same price as your potential buyer is prepared to pay. It is usual in the first instance to approach the company secretary to ask him or her to confirm the process and also, if required, seek their views as to likely buyers. How much time and effort to invest of course is dependent on likely value of the holding. As a seller, you should not need to concern yourself with stamp duty.

As Simon says, unless it is a material stake, (or when added to the existing stake of a potential buyer would give the latter an interesting stake) I imagine it is a buyer's market.

 

I'm sure you can buy and sell shares in a locomotive company like any other. In theory.

In practice I'm not sure why anyone other than an enthusiast would want to buy them. Its not as if they are ever going to pay a dividend or the company will ever be profitable in any real sense. And most enthusiasts would probably rather buy a share directly from the company and have the company (and therefore its project) get the money rather than buy one from a third party. The shares I own I consider to have been a "donation with benefits" and to have no practical value.

Easiest thing might be to try and find someone who'd like to swap their share for yours, but as noted above it may be more complicated than that. I just found the articles of association for the shares I own(try https://beta.companieshouse.gov.uk/) and was drowned in a particularly impenetrable tide of legalese, but the impression I got in this particular case was that I needed t o involve the company in a transfer of ownership, so it might be good to start there.

 

@35B guess you missed the invisible smiley at the end of my post.

 

Probably

 

One warning about loco shares.
A group at one of the four preserved lines I've worked on bought a loco and I purchased £100 worth of shares in said loco.
The years rolled by, I moved away and eventually lost my share certificates in a house move.
After twenty years that loco was sold to another group on another railway.
I managed to find an address for the original group and contacted them.
"Everyone received 150% of what they invested" I was told. I replied that I had received nothing only to be told
"Well I THOUGHT I've paid everyone on the register. I'll send you some money if you can find your certificates".

 

Thanks for the reply chaps, I expected as much in all honesty. It was just a irking curiosity. I'll most likely hang on to them

 

But keep 'em safe!

 

This thread does crystallise for me a general misgiving I have about loco-owning groups (and others, for that matter) structuring as shareholding companies. Most people who buy shares in such schemes tacitly recognise that really they are just making a donation to keep the locomotive running. But in that case, why not just make a donation - preferably to a charity that can reclaim gift aid? Or if you are worried about some notion of democratic control in exchange, make the society a membership body, with an annual subscription that brings voting rights all the time you are a paid-up member.

The problem with a shareholding model is that you either get administrative problems as outlined by @22A, in which the company loses track of the shareholders, which is potentially problematic if there is a sale. Or else the company is scrupulous in keeping records, but the effort to keep in contact every year soon drains the donation in simple administrative charges. That £50 you paid in 1983 seemed like a lot of money then, but has no doubt been spent several times over just in sending out an annual report and call to an AGM. Better to have had an annual subscription model, let it rise in line with the rise in costs, and accept the ebb and flow of members leaving and new members joining.

Tom (descending from soapbox...)

 

I think that that is a good point. The issue IMHO with 4160Ltd was about control of the loco, it just had a different model to some other loco owning organisations

 

Two reasons spring to mind, one from each side.
From the purchaser's side it means you feel you have a real stake in a genuine steam engine. I kinda like that feeling.
From the company side it means you have a base bunch of people who have a genuine sense of ownership, and may well be more committed for longer..

 

Certainly a fair point, although I'd suggest more so for smaller organisations like loco owning groups. GWSR has obviously done very well out of share offers and EIS incentives which of course you can't get with donations.

I remember on the P&O launch date during a speech the first chairman was talking about shares sold in the 1980s as "if you can call them shares, who knows what they were, we weren't really sure what we were doing" or some such.

 

Fair enough - maybe I'm different in that I've never felt the need to have some kind of stake. I have made (or continue to make) donations to a couple of loco-owning groups, and for me personally, the pleasure and sense of involvement is simply from the donation. Personally, I feel a greater sense of involvement on account of a regular standing order, far more than I may do had I made a significant donation, say, 30 years ago but not much since. I also prefer groups that are as administratively efficient as possible!

Tom