Lynton and Barnstaple - Operations and Development

A good question!

Never really thought it about it in detail before, but I have always assumed that the LBBC bought - and therefore still owned - the old station building and the various add-ons which together make up the current OSI. Certainly the various Trust references to the 'new land' on the west side that would accommodate the new platforms and passing-loop have always made it clear specifically that it was Trust property (by a separate purchase) and therefore unaffected by whatever happened to the LBBC-owned land.

If correct, then the LBBC could fail and hence lose the old station building, which would not affect the Trust in terms of its new trackbed route, but of course would lose it the benefit of the extra railway accommodation and the possession of another heritage structure.

 

Yes, my point being that because the physical building has such obvious heritage relevance to the charitable purposes of the L&B Trust, then making a decision about whether the investment makes sense is much more nuanced.

Should the L&B Trust invest in a pub business of marginal profitability? Clearly not.

OK, should they have bought one of the few remaining L&B buildings, even in an empty / unused state? In my view yes, it advances their charitable purpose, even if running trains is perhaps years away.

OK, should they buy one of the few remaining buildings that contains a marginal pub business? Now it gets complex!

Tom

 

And that complexity is compounded by the the strong suggestion (at the very least) that it was purchased at a significant premium, together with the complicated web of transactions surrounding the business, one of which seems to include transfer of the "ransom strip" section of future trackbed to the L&BRT.

 

The guidelines/rules of the Charity Commission are on their website and give a fairly succinct idea of what cannot be done with charitable funds and the duties of Trustees if a subsidiary appears to be failing. Another quote: 'a parent charity must not make donations to the trading subsidiary.'

 

That leaves some question over the correct course of action in the particular circumstances of this payment - taking the assertion of a donation for a specified purpose, it is then necessary to determine whether the trustees were obliged to follow the donor(s)' wishes, or to refuse the donation as inadmissible. That position is further complicated by both conflict of interest where roles are held in both organisations, and the questions quite rightly highlighted by @Jamessquared regarding the significance of the site.

 

If the heritage asset (building) were owned by the LBRT and leased to the LBBC then that might be a very acceptable use of resources as @Jamessquared has indicated. I have an impression that the asset is owned by the LBBC, which makes the whole thing a bit less transparent.

I cannot help thinking that an organisations and their intertwined relationships seem to have been devised with good intentions, but are over complex and as a result those relationships are at best obscure. This doesn’t help with building trust over the longer term.

 

I was thinking that myself

 

Indeed. My vague feeling is that in the big picture, the railway has probably achieved an important outcome (bringing another station building into the fold) but ironically by trying to be a bit too clever with the structure have made the whole thing more opaque than it should be. (What is it with heritage railways that makes them think they are major players in the FTSE 100 when it comes to corporate structures!)

I come back to what to me is a key question: what happens if the pub business fails? (*) If the building and land remain protected for the railway, all well and good. If they had to be sold or mortgaged to pay off creditors - less good.

(*) For the avoidance of doubt: I am not wishing the pub to fail. But the charity has to consider plausible risks, and what the impact on both the strategic assets and financial viability of the charity would be in the event such risks eventuated.

Tom

 

My understanding from reading this thread is - in addition to their investment in shareholdings, the Trust loaned £x cash to LBBC part of which was meant to be repaid in cash by a certain date.

When this became due LBBC offered to issue additional shares instead of paying the cash, and the Trust accepted. This clears part of LBBC’s debt but means even more of the Trust’s assets are tied up, long-term, with LBBC and any associated risks. What happens when the next repayment is due?

Is this interpretation correct?

If anyone made a donation as part of this deal, I hope it was to the Trust, not LBBC, to make up for the tied-in cash.

 

Issuing shares instead of paying a debt surely requires the shares to have an equivalent value. They obviously have a face value but that may differ considerably, in either direction, from what would be a fair price if an existing shareholder wished to sell to another person. Given the uncertain profitability of the pub and the possibly excessive price paid to buy it, I suspect that the current real value of each £1 share (insofar as a value can be placed on it) is somewhat less than £1.

 

There are better ways to educate the public about railways, and why they matter.
My all-time favourite is at the Catalonian railway museum in Vilanova i la Geltrú. My friend and I visited it in about 1997 or so, the staff on the ticket desk asked where we were from then said "come this way", took us up to the auditorium and insisted that we watched a film... which it turned out they have an English version of, which they played just for us. This was a brief history of the railways of Spain, with synchronised special effects such as signals which lit up when mentioned in the film, display cabinets which lit up when certain artifacts were mentioned, and even at one point a simulated lightning strike with sound effects and flashing lights... all of which was probably more memorable than the museum proper (even though they have an enviable collection of steam engines), and I definitely learnt something. Well, I retained two useful pieces of information; one, that Spain never had a canal network, so the coming of the railways was even more revolutionary than it was in the UK, and two, that a visit to this place should be compulsory for anyone who has the task of developing a railway/educational visitor attraction.

 

Hopefully they still had more votes 'for' than 'against' otherwise they have been rejected by the members and should not be in office. Is there any intention to publish the voting figures?

 

post now irrelevant thanks to information given below

 

All motions were passed at both AGMs, with more votes 'FOR' than there were 'AGAINST'

 

I

expect the voting figures will be published at some point but to clarify all were on the plus side

 

I am sure that there are interesting, informative, and memorable museums. My point was only that certain people would apparently defend virtually anything if it somehow conforms to the 'education' bit of the charity charter.
I personally doubt many youngsters, overawed by the sight, sound and smell of Lyn think 'wow, when I grow up I want to be an unpaid public educator devoting my weekends to increasing public awareness of the practical unimportance of an uneconomic railway line in North Devon'

 

You are more likely to get their attention if you are doing something for the environment on their smartphones

 

The Trust did subscribe for shares to help the purchase of OSHI in 2023, but in 2024 another £165,000 were allotted, and in the same year LBBC repaid the private lender £160,000 as it was required to do under the terms of the loan. According to the LBBC accounts another £160,000 repayment is due by the end of December, and, at 31.12.2024 LBBC had only £116,000 in the bank. LBBC's assets are fully secured to protect this loan, so I am therefore assuming that, unless there is a dramatic improvement in LBBC's profitability, the plan is for the Trust to subscribe for more shares to enable this repayment to be made, and the £25,000 due to be paid off the Trust's loan.

 

Yes, it's a debt:equity swap. LBBC is unable to service its debts & the Trust is effectively picking up the tab.

I'll leave you to decide if close on £2mn was overall a fair price for a station building embedded in in pub.

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