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Llangollen Railway appoints receivers

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WesternLancer

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In reality surely there is a pretty limited market for this stuff and with the heritage railway sector at a pinch due to a year of very low income how many places are really going to need to buy much of this stuff?
Perhaps the workshop equipment has a wider market.
 
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Tynwald

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Have heard a suggestion that some of the items being offered for sale were not actually owned by the PLC......

TPO
But were used as security for bank loans.

allegedly
 
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WesternLancer

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But were used as security for bank loans.


allegedly
would that lead someone to think that a lender may not have carried out careful checks on the ownership of assets offered as security in terms of ownership...
 

Train Maniac

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Some of the coaches and rolling stock are PLC owned so will be up for grabs. Also some of the engineering equipment from the loco works.
There's been a few questions over some things. Possibly some of the track on the extension towards Corwen is PLC owned.
So hang on, is there a real prospect that the Corwen extension many never open?
 

kje7812

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So hang on, is there a real prospect that the Corwen extension many never open?
Since posting, I've seen mention the disputed section of track is actually between Glyn and Carrog, thus cutting the line in half.
Either way, a problem. If the track is used to pay for debts, then new material will be required to replace it. I don't know how much spare material the railway has to hand. If it does have any, it may be PLC owned and thus be up for grabs as well.
Urgh, it's a mess.
 

swanhill41

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The facts are that the railway has what could be described as terminal financial issues..The fact that they have gone bust in practice means their expenses got way ahead of its income..In tandem with this the assets they owned were either used a security for loans or and they do not cover the debts accrued by the trading organisation.
What I find a mystery is that the Trust that it was say a subsiduary of ,were not aware of the ongoing issues and in some way did not help the trading side stay afloat.
At present the Trust has the keys to the railway,in that it I think it owns some of the track and buildings,but they have no way in operating a railway.
So along with other issues of ownership,some of the track at the Corwen end is I believe not in Trusts or the local councils hands .but in private hands ,this is what can be described as a can of worms.
A source has indicated that at best the Llangollen at best might be a short shuttle at the Llangollen end..But if a sugar daddy came on the scene?.We can dream.!
 

Bevan Price

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I wonder who might want to buy any of the track, when the cost of removal could well exceed the value of the track. ?
All very sad. I hope that the local council will try to help find a method of saving the railway, even if it cannot contribute many funds itself -- it must bring a lot of tourist income to the area.
 

torten

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I wonder who might want to buy any of the track, when the cost of removal could well exceed the value of the track. ?
All very sad. I hope that the local council will try to help find a method of saving the railway, even if it cannot contribute many funds itself -- it must bring a lot of tourist income to the area.
I doubt any other preserved railway would touch it for that reason, as well as the ethical reason. I suspect the trust will grab it up at auction for a little above scrap value and worst case, they purchase it off a scrap dealer before it is lifted.

Anyone who lifted the track would need to comply with ORR guidence and the Llangollen's own safety case on track work as well, and would need to present their own safety case as well. Lifting it would cost far more than the scrap is worth.
 

ic31420

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I wonder who might want to buy any of the track, when the cost of removal could well exceed the value of the track. ?
All very sad. I hope that the local council will try to help find a method of saving the railway, even if it cannot contribute many funds itself -- it must bring a lot of tourist income to the area.

Buy it and lease it back / sell it back as a sort of ransom strip? It's a bit high risk and low returns.

The whole thing is just a mess.and I suppose highlights the issues that heritage railways have operating as they do as quasi trust/charity/businesses lead by people who are often experts in none of the above.... Who is.
 

Master Cutler

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Personally I would like to see the whole line, Llangollen to Corwen, given special heritage status and temporarily preserved under the administrative control of Local government.
Then with all creditors listed as investment associates given shares in future operating dividends.
At the moment the situation for the Llangollen line is like consortium owning a racing car but some of the owners removing the wheels to repay debts, leaving the body and engine motionless in the pits.
A lose lose situation, but with my limited knowledge, that’s how it looks to me.
 

paul1609

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I feel sorry for the Llangollen volunteers but theres going to be massive implications for all the railways that followed the plc model if the liquidators/administrators are unable to recover funds. It is basically saying that any charge held is worthless
 
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Mcr Warrior

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Might well make it more difficult for cashflow-strapped heritage railway plc entities to borrow £££ in the future.
 

LNW-GW Joint

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The local council (Denbighshire CC) will have an interest in keeping the railway in existence for its wider tourist appeal and benefit to local businesses.
But finances are very stretched round here, even without Covid.

Llangollen's other major attraction is the International Eisteddfod in July.
It was cancelled last year and is likely to be a much smaller-scale event this year with Covid restrictions, particularly on foreign travel.
It had a special grant from WG last year to see it through, but like all performance events things are highly uncertain.

I doubt the council will be a white knight for the railway, with so many other demands on funding.
It's also a Senedd election year, so no big WG decisions are going to be made until that is over.
Currently it has a Tory MP but a Labour Senedd MS.
The latter is Ken Skates, currently the WG Minister for the Economy, Infrastructure and North Wales, so likely to be in the thick of the debate.
 

simonw

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Personally I would like to see the whole line, Llangollen to Corwen, given special heritage status and temporarily preserved under the administrative control of Local government.
Then with all creditors listed as investment associates given shares in future operating dividends.
At the moment the situation for the Llangollen line is like consortium owning a racing car but some of the owners removing the wheels to repay debts, leaving the body and engine motionless in the pits.
A lose lose situation, but with my limited knowledge, that’s how it looks to me.
What future operating dividends do you think the railway will ever be in a position to pay?
 

Master Cutler

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Retaining the railway as a complete functioning asset, and assuming the passenger numbers return, the possibility of long term profit is more likely.
Alternatively, a short term liquidation of whatever assets are up for grabs will significantly reduce any chance of ever generating a cash surplus.
 

BayPaul

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Retaining the railway as a complete functioning asset, and assuming the passenger numbers return, the possibility of long term profit is more likely.
Alternatively, a short term liquidation of whatever assets are up for grabs will significantly reduce any chance of ever generating a cash surplus.
There comes a point in any loss making business where there is no point throwing good money after bad, and all the administrators can do is have a fire sale. If heritage railways are somehow protected from this, then none of them will be able to borrow in the future. I think Llangollen reached this point well before covid.

Hopefully the structure in place at Llangollen with the ownership of most of the heritage assets separate from the trading company will allow the line to be mainly protected, so that a restructured charity can restart at some point in the future.
 

Mcr Warrior

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Surely some material misrepresentation by plc officers if assets that didn't actually belong to the plc (as has been suggested upthread) were being offered as security for lending to the plc (without there being any guarantee or indemnity from the assets' actual owners) and maybe also a lack of adequate due diligence on the part of the financier(s).
 

Ianigsy

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Surely some material misrepresentation by plc officers if assets that didn't actually belong to the plc (as has been suggested upthread) were being offered as security for lending to the plc (without there being any guarantee or indemnity from the assets' actual owners) and maybe also a lack of adequate due diligence on the part of the financier(s).
This is an element of what I do in my day job.

You can give a charge over any tangible asset, but if there isn’t an external register like the Land Registry then it becomes more risky. It’s entirely possible that the ownership has been forgotten about by the PLC officers, particularly if it was arranged back when the line was extending to Carrog under a gentlemen’s agreement. The company I work for would revalue the security every few years, but something as specialised as railway track would normally have far more value as part of an operating railway than as scrap metal. Recent street improvements in Leeds exposed some of the tramlines abandoned in the 1950s - and they were covered back over again once the work was done.

The lenders will be looking to get at least something back and if they’re smart will have security from private individuals as well as the PLC for precisely this kind of situation- the issue for them is that they would have to give the guarantors reasonable time to come up with the cash while the clock is ticking down on the sale by auction.

As far as I can see, Llangollen is a basically sound and well-regarded operation which has been dragged into this situation by a combination of COVID, the mismanagement of the engineering department and the rush to get Corwen done to meet external funding timescales. Once the coach parties and day trippers come back, it’s a viable proposition.
 

LSWR Cavalier

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Perhaps the whole thing could be cleared, assets sold, and restarted slimmed down with a couple of saddle-tanks. One hopes other lines are observing and learning from this. Many different outcomes are possible.
 

simonw

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Retaining the railway as a complete functioning asset, and assuming the passenger numbers return, the possibility of long term profit is more likely.
Alternatively, a short term liquidation of whatever assets are up for grabs will significantly reduce any chance of ever generating a cash surplus.
Preserved railways, except for the few run as purely commercial ventures, rarely if ever generate operating surpluses. Virtually all of them have to go cap on hand to their members and supporters year after year.
 

seagull

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A source has indicated that at best the Llangollen at best might be a short shuttle at the Llangollen end.

That would be very unfortunate but also an interesting full circle: as my first memory of the Llangollen Railway was seeing "Burtonwood Brewer" operating shuttles to Pentrefelin, the end of the line then. A very ramshackle, informal but friendly and welcoming railway which house moves over the years meant I lost touch with.
 

Tynwald

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This is an element of what I do in my day job.

You can give a charge over any tangible asset, but if there isn’t an external register like the Land Registry then it becomes more risky. It’s entirely possible that the ownership has been forgotten about by the PLC officers, particularly if it was arranged back when the line was extending to Carrog under a gentlemen’s agreement. The company I work for would revalue the security every few years, but something as specialised as railway track would normally have far more value as part of an operating railway than as scrap metal. Recent street improvements in Leeds exposed some of the tramlines abandoned in the 1950s - and they were covered back over again once the work was done.

The lenders will be looking to get at least something back and if they’re smart will have security from private individuals as well as the PLC for precisely this kind of situation- the issue for them is that they would have to give the guarantors reasonable time to come up with the cash while the clock is ticking down on the sale by auction.

As far as I can see, Llangollen is a basically sound and well-regarded operation which has been dragged into this situation by a combination of COVID, the mismanagement of the engineering department and the rush to get Corwen done to meet external funding timescales. Once the coach parties and day trippers come back, it’s a viable proposition.
The engineering department ran the railway, that is the problem. Running big locos, on big trains, full of fresh air. But that is what it was all about. no customer or business focus whatsoever.
 

alexl92

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I'm not massively familiar with the geography of the Llangollen railway or the makeup of its services... How feasible would it be to run pretty much exclusively with tank engines and 3 - 4 coach trains (except maybe in high summer?)

When I say tank engines I'm thinking of the couple of pannier tanks they have plus maybe the industrials Jennifer and Austin 1 (I understand these are up for sale but the trust have said they hope they'll stay on the line for the forseeable so working on that basis). I imagine they're significantly cheaper to run than some of the larger GWR tender locos?

Afterthought ...having said that ^, according to Wikipedia, they only have 4 operational steam locos, of which just one is a tender engine - Austin 1, Jennifer, 6430 and 3802, with 7754 due back this summer and 5199 out on loan.
 

Bletchleyite

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I'm sure they'd attract in loco preservation societies if they found themselves short of locos, and I doubt there is a shortage of people who would volunteer to be drivers, firemen and guards (as that's the fun "playing trains" bit), and Mk1 and Mk2 fresh-air coaching stock is hardly rare, either. The main thing of concern is the infrastructure, as once a housing estate gets plonked on any part of it it's gone for good.
 

WesternLancer

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I'm sure they'd attract in loco preservation societies if they found themselves short of locos, and I doubt there is a shortage of people who would volunteer to be drivers, firemen and guards (as that's the fun "playing trains" bit), and Mk1 and Mk2 fresh-air coaching stock is hardly rare, either. The main thing of concern is the infrastructure, as once a housing estate gets plonked on any part of it it's gone for good.
Well, I guess that is where the council can come in - as one thing they can do, at no cost to themselves, is safeguard lines of route in planning processes to prevent housing estates getting plonked on any part of it, at least.
 

Titfield

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I notice the reference to coach parties.

This market has been in long term decline with numbers of passengers / uk coach holidays falling year on year.

There have been high profile casualties e.g. Shearings.

I dont think too much reliance can be placed on this market sector long term.
 

LNW-GW Joint

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I notice the reference to coach parties.
This market has been in long term decline with numbers of passengers / uk coach holidays falling year on year.
There have been high profile casualties e.g. Shearings.
I dont think too much reliance can be placed on this market sector long term.
That may well be true generally, but Llangollen is a popular coach day trip from north-west/midlands origins, and its attractions are more than the railway.
It is just one of several things to do in the town, and many will just gaze at the train movements in the station while eating ice cream on the Dee bridge, watching the canoeists in the river or the horse-drawn narrow boats on the canal, or attempting the first bit of the steep climb to Castell Dinas Brân or the walk to Horseshoe Falls.
There might also be an antiques fair at the Eisteddfod site, and bikers like to congregate at the Ponderosa cafe at the top of the Horseshoe Pass.
The coaches, and bikers, will keep coming even if the railway is moribund.
 

Ianigsy

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That may well be true generally, but Llangollen is a popular coach day trip from north-west/midlands origins, and its attractions are more than the railway.

And having checked over lunchtime, the only regular public transport connection to England seems to be the bus to Oswestry. These things matter the older you get.
 
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