Calling in the receivers

By | Category: Travel rumblings

On St David’s Day of all days, one of Wales’s heritage railways – Llangollen Railway –have had to appoint receivers.

Side-side on the Llangollen Railway. Image – John Berresford

It seems that a number of significant engineering contract disputes, which amount to over £250,000 and which the railway cannot afford have prompted the action. Total debts are about £350,000

But there is both the railway company and the trust with the trust remaining solvent.

Consequently the trust is going to negotiate with the receiver to try and buy the line and preserve the rolling stock and infrastructure. The trust hopes to start operations as soon as it is able although this might be a while off.

And it pre-supposes the receivers will sell it to the trust and not another concern.

In the meantime all the staff and volunteers have no role and any passengers with outstanding tickets for train journeys or anything else connected to the railway should apply for a refund by e-mailing commercial@llangollen-railway.co.uk.

The collapse of the railway isn’t due to coronavirus although that can’t have helped. It looks like the debts were racked up before the pandemic hit.

Nonetheless by calling in the receivers, the company has probably managed to get out of paying much of its debt and a new company will start with a clean balance sheet.

Many businesses have used this approach to close down and re-start the next day although there is no suggestion that this is happening in this case. 

Are other heritage railways and attractions facing similar financial constraints?

Last year any number of heritage railways had to supplement their income with even more fundraising than usual. The Talyllyn Railway raised £75,000 is a short space of time. The North Yorkshire Moors Railway raised £440,000 last year and the West Somerset Railway raised £185,000 before the end of June last year and managed a government grant of £865,000 on top of that. 

Supporters of heritage rail in the UK were very supportive last year. With furlough payments and government guaranteed loans (both of which the company used) the Llangollen Railway had opportunities to improve its balance sheet.

Rail tourism enthusiasts will await to see what emerges.

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