Lynton and Barnstaple - Operations and Development

It’s a story that never ends well… (pun intended)

 

Indeed. I'm just trying to understand why it would be in the interests of the L&BRT to do that - and what it says about the actual position of OSHI that such a discussion was necessary.

 

Sorry - Yes I meant Companies House! My bad.

 

You’ve lost me here!

 

i seem to recall it was 3 of the sitting trustee's that refused to work with 2 of the newer ones

 

The L&BRT has both loaned money to OSHI as an unsecured lender and purchased "B" (i.e. ordinary investor) shares in it. LBBC has apparently reported that it reduced borrowing by £225k, as well as doing better than expected in the sale of Class B shares.

Companies House reports that £230k of shares were sold between July and December 2023 (presumably actually October given the closure of the share offer). For something that was close to it's end, and had already succeeded, that's a very impressive performance. However, the proximity of £225k and £230k could suggest to a suspicious mind that the Trust converted borrowing into shares.

That seems an odd thing to do, given the constraints of charity law and the perfectly reasonable suggestion that payment of dividends will be challenging at this stage in LBBC's ownership of OSHI.

Still, I'm sure clear answers will be forthcoming before long.

 

Well, I'm sure you're right, I only heard one of them actually say it...

 

It would of course be interesting to know exactly how much all of this messing about has cost over the last 3 or so years.
It is known that the incident around Chris's nomination cost £6k and that was two little cock-ups so Annes last year has to be another £3k, then there is Annes disciplinary which she suggested to me was a couple of pints short of £1k so her appeal could possibly be a similar figure and then there's this total waste of time EGM, the paperwork again must be around £3k, possibly slightly more so we are looking at between £13-£15k, i for one am not impressed with such a waste of money frankly due to incompetence and arrogance

 

I suggest that we wait for hard facts before speculating.

 

I'm going off hard facts, and trying to deduce how they may have arisen. If my supposition is incorrect, which would delight me, then I will be glad to have that corrected.

 

An allotment of £230,800 B shares on top of the £1,111,000 shares we already knew about was made on the last half of 2023 according to the document registered with Companies House in February. If these are all new investors fine, but if not, LBBC shareholders will feel their investments are being watered down.

 

If I was being cynical I'd be thinking that the loan would never be repaid, as this one was planned to be over 10 years, and a dividend on the money might be less than 5%.

 

I bought shares in OSHI just before the closure offer because a) I was in a position to buy and b) the communications stated that the sale had been agreed and any additional sale of shares would reduce the level of debt. I have not bought shares in OSHI expecting to be paid a dividend or to make a profit, but because it is an important piece in the L&B jigsaw. Perhaps others did the same?

For clarity, I did vote against all three resolutions at the EGM.

 

I should imagine this is the sentiment of most who have bought shares, it was to enable the railway to obtain an important part of the whole, not to make profit.

 

I’m sure that you are like many of the individual investors, as with so many projects associated with railway preservation.

My specific concern was over the amount of Trust money tied up in a peripheral business which may not even be generating a return to the Trust, and is unavailable for other purposes (eg extending the railway).


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As the published potential share issue was greater than the number of shares actually issued, this is a rather odd statement to make.

 

With respect, not a bit of it. The Blackmoor Company took over an existing operating business. Nothing needed to change immediately except, it is reported, installing a manager. No consolidation - merely carrying on as before until the directors could sit back in the light of experience and maybe change things to improve it or it's profit. The acquisition of stock, coping to pay 'the mortgage' etc., were all part of the business plan in a situation where loans and share issues had to be arranged to buy the business. And the Company has raised at least £580,000 in a loan, in the case of this one, secured on it's assets, and has the need to fulfil (or attempt to fulfil) whatever promises (or stated intentions) were made in the prospectus to the potential investors, now £1.3m, including, it appears nearly £1/2m held by the Trust. The Company will need to pay at least £34,800 pa interest on this loan, before a dividend can be contemplated.

 

@Michael B is right, of course. The Trust has an exposure to LBBC/OSHI of at least £503,000 + interest, despite the nonsense that appears from Woody Bay from time to to time. @Snail368 (rightly) wanted some hard facts, so this is what I think we know:

We know from Companies House that the current share capital of LBBC is £1,341,783, covered in the filing on 19 Feb 2024 (see here) of which 50,000 are the A shares. This is an increase of £230,800 in share capital from £1,110,983 last reported.

But: this £230,800 isn't all the new capital, as I am told that at least £25,500 worth of shares have been transferred from some existing to new shareholders, which should show when the Register of shareholders is updated. This means the total amount of new money is £256,300.

Because the Companies House register hasn't been updated yet, we don't know who has bought these new shares.

But there are clues.

The publicly available data showed that there were two loans to LBBC. One was a secured loan of £580,000 @ 6% from a CIC Director, and the other was an unssecured loan from the Trust of £250,000 @ 5% (don't ask how an unsecured loan could possibly be cheaper than a secured one.) The secured loan doesn't appear to have a public capital repayment schedule, whereas the Trust loan had 10 equal annual repayments of £25,000 plus the annual interest.

The recent missive to LBBC shareholders reportedly says that debt been reduced by £225,000, but as there's been no changes to the secured loan, it must be the Trust loan has been partially or wholly repaid (as it was unsecured, it was not registered as a charge at Companies House.) But the same missive to LBBC shareholders made much of the pub making an £18,000 profit (details/timing unknown) then it's impossible for me to understand how the Trust's loan was repaid except by converting some or all of the Trust's loan into B shares.

And the numbers support this: if there is £225,000 loan conversion into B shares, then that leaves £31,300 of other new shares, which is about the same as the reported (sorry, can't remember where) "30,000" new shares purchased by actual investors after the purchase of OSHI was completed and before the offer closed.

The questions that the Trust Board needs to answer are these:

(i) how many B shares does the Trust now own?
(ii) when did they purchase them?
(iii) how much does LBBC currently owe the Trust?
(iv) if the loan (or a substantial proportion of it) was converted into B shares, when was this approved by the Trustees?

 

If it’s not been posted already - a lot of traffic on the Friends of the L&B facebook page following the EGM.



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[QUOTE=". @Snail368 (rightly) wanted some hard facts, so this is what I think we know: [/QUOTE]
Tobbes has supplied an interpretation of what has been published. This is interesting, but it may or may not be correct. One thing I've learnt over the years is to get a full (or as full as) understanding before reaching conclusions. It will be interesting to see the documents as they are published or released to the members/shareholders, etc.