West Somerset Railway General Discussion

So once again, its more about acquiring the freehold, owned by a charity, that in turn is owned by the PLC, anyone see the obvious problem here? acquire the freeholding, which then enables the PLC, or a new controlling shareholder, the ability to generate money from redeveloping the non essential land the railway sits on,

 

They've already hocked the lot to the bank, every thing they own now and in the future. Charge code on companies house
0101 0188 0005.

 

Thank you

The relevant bit is in Section 7

We firmly believe that the only role for the WSRA is to fold itself into the proposed new charitable structure. In that event, all WSRA assets would be transferred to the new charity, and the WSRA would effectively cease to exist

 

Which, of course, the WSRA Trustees could only recommend to their members to vote for if they had confidence in the proposed new structure.

Robin

 

Why does setting up a new charity cost so much, justification please? (Not from you @Andy Norman, the PLC)
Why does the charity have to own the freehold?

 

Presumably cost of acquiring the freehold is factored in.

 

What is the obsession with owning the freehold and why would it be critical to the success of the new charity? (Ignoring the unverified speculation about selling off land).

We know that the WSR is skint at present, but the statement said that the success of the new charity would depend on owning the freehold-nothing to do with current debt. Many railways operate as leaseholders without problems with raising money, why should the WSR be any different?

Keith

 

Good questions. These statements are in the public domain. This is a consultation. I would suggest that WSR plc shareholders and other supporters or stakeholders ask those questions directly of the makers of the statements.

Robin

 

I think, almost everyone involved in WSR and those watching; would agree that, “I wouldn’t start from here”.

It’s a bit of a mess that has evolved.

 

Is this really what the "railway family" wants! I think not, we must be sure that all opinions and ideas are listened to, not just the big boys who shout loudest and put out long complicated briefing papers. Surely the present status of the plc should not be allowed to continue. Ideally the freehold SHOULD be held by an INDEPENDENT organisation.

 

Oh dear, here we go again...

"John Bailey commented that this was a deceptively attractive proposal to form a single controlling charity. He could not argue about the aim but the process had been dishonourable using a ‘Trojan Horse’ situation leading to a distortion of democracy.

"The process " has not even begun and will not begin if it is not supported by the WSSRT members.

The process deliberately sacrificed the independence of the WSSRT

Ditto.

and the outcomes could have a negative impact of working with external institutions (eg ORR) in compromising effecting corporate governance.

"...could have..." ? Again? Yet again critical but nothing definite - and there's nothing to say that, alternatively, it 'could have' a positive impact

Under Charity Law, it would be the duty of Trustees to pursue the charitable aims of the Trust and not the members.

So how is this different from the way the WSRA and the WSSRT currently operate?

John Bailey added that huge progress had been made during this meeting towards ‘One Railway’.

Well that really would be good news, unfortunately (and I believe I am not alone on here in saying that...) words are cheap and we have seen many other suggestions such as this come to nothing. Positive action and not just words will be needed convince me.

 

The estimates are a worst case scenario of accounting and legal fees. I believe it could be done for a lot less especially if energies were directed at persuading grant funding bodies to fund re- structuring costs. There are such bodies out there.
The short answer is that it in principle it doesn't. However the immediate challenge is how is it going to raise the capital it needs to survive? One estimate has the cost of essential track replacement at £5million. My personal assessment was that it needs an immediate capital injection of around £3million. In that situation a normal business option is to obtain loan capital secured on property. By not owning the freehold the railway is missing one of the best opportunities it would otherwise have to establish a firm financial footing. The advantage of the charity holding the freehold is that there are restrictions on charities disposing of land they own so avoiding any opportunistic disposal for redevelopment.

 

It already does, as far as I can see, i.e. the SCC.

 

I do not recall how much the WSR pays SCC per annum. The freehold would cost what, £3,000,000? At 4% that would be £120,000 per year in interest, never mind redeeming the capital. The only possible reason for purchase would be if there were a doubt over the security of tenure, but the WSR has a 99 year lease from a respectable landlord, so should have no doubts about security.
How do you borrow against an asset that is already 100% mortgaged, as that would be the case in the event that a freehold purchase could be arranged.

 

The S&DRT thought they had a long lease from a reputable landlord too.

Sent from my SM-T590 using Tapatalk

 

We all thought the S&DRT had a long lease from a reputable landlord.
We just weren't aware what the WSR PLC would develop a reputation for

 

Quite so. We are more likely to see Israel and Hamas shaking hands as they agree a solution to the Palestine issue, than to see harmony on the WSR without plc domination.

 

Thank you for the explanation.

The obvious question then being why not use the WSRA?

 

An immediate £3 million cash injection, that's a new revelation. The PLC have said the WSR needed a £500k per year increase in income before covid after it told all it achieved a £1.1 million turn round in just 12 months. The WSR raised circa £250k and completed much work on the track so there does seem to be a short fall for this first year but circa £250k and they put out a press release saying that they would make that up from thier funds earlier this year, so according to them no immediate major issue and they have said that trains will be running at xmas.

The £500k figure was known for a while before the PLC stated it so it wasn't new, it was one of the reasons some of us were trying to get fund raising in place (£1 million pa achievable target) so as is know £500k could easily have been gained through grant funding, no mortgaging, no re-structuring, no extra costs, etc.

You seem to be saying either:

• During covid it has been discovered that an Immediate £3 million is needed, or
• Covid has cost the WSR £3 Million or
• The PLC missed a very big £3 million show stopper.

To me none of this adds up, literally. Lets hope this does not turn into another 'either do this or the WSR closes' gun to the head approach which has been tried before.

 

Interesting. Does this paragraph from the Charge mean what I think it says?


Where are the accountancy/banker/legal bods? Does this mean that even if they bought the freehold it would already be mortgaged to the bank?