“Great regret” as Llangollen Railway to enter receivership
The future of a heritage railway is in doubt after it was announced that that the organisation’s directors had taken the “reluctant step” of inviting the bank to appoint a receiver.
Llangollen Railway, a major attraction in the Dee Valley, is said to put approximately £8.5 million into the local economy every year.
However there is uncertainty over the its future, with the Llangollen Railway PLC accounts showing pre-tax losses of £330,601 in 2018, £329,175 in 2019 and £258,804 in 2020 (pre-audit).
In a statement today Llangollen Railway PLC said a number of “significant engineering contract disputes, all of which arose in the years prior to the current board taking over in October 2020, have crystallised in the last few days”.
The company says the claims against the company are “compelling and are in excess of £250,000 in total” and that there “is no prospect of meeting these liabilities, even over an extended period.”
The statement continues onto say: “As a result the balance sheet is now insolvent to the extent of £350,000 approximately, adjusting for intangible assets also.
“In such circumstances the company cannot legally continue to trade.
“The directors would like to acknowledge the considerable support of the Welsh Government through two significant grants, and NatWest Bank which, together with furlough payments, have enabled the company to continue to meet its commitments over recent months until now.
“The Trust’s balance sheet remains solvent and there is some cash in hand.
“The Trust board will need to take steps to negotiate with the receiver to try to secure the line and preserve rolling stock and infrastructure to the extent possible. It is intended to recommence operations in due course but this is dependent upon legal and regulatory approvals, including licensing, all of which will clearly take time.
“The directors very much regret the impact this will have on our staff and employees, customers, suppliers, locomotive owners and their organisations, and anyone else with connections to the Railway.
“It is hoped to rehire many of our staff and employees and that it will be possible to maintain connections with many longstanding friends.
“Customers who have purchased tickets in advance, including driver experiences, deposits for weddings and gift vouchers, will either be refunded (the monies have been reserved) or will hopefully be able to travel at a future date.
“Where shareholders have ongoing annual ticket entitlements, these will continue to be met through the Trust.
“Anyone wishing to make a claim in the receivership should contact the Railway by e-mail at email@example.com and details will be passed to the receiver.”
Reacting to today’s news, Clwyd South MP Simon Baynes, said: “I have developed a strong relationship with the Llangollen Railway since becoming the MP for Clwyd South and have held regular meetings and made several visits to different parts of their network.
“I am very sorry that they have had to invite their bank to appoint a receiver but the combination of Covid and past engineering contract disputes has put an intolerable burden on the Railway.
“I hope, however, that a way forward is found for the Llangollen Railway so that it can emerge from this crisis with a sustainable long term future and continue to provide great pleasure to the many thousands of visitors to Llangollen in the years to come.”
Llyr Gruffydd, Plaid Cymru’s North Wales MS, said: “This is a sorry day for the railway but also for Llangollen and Corwen.
“This has been a terrible year for the tourist trade, effectively facing three winter seasons consecutively, and I hope that the railway, its staff and volunteers can bounce back quickly. It has been a major attraction in the area for many years and has been an important employer in the town.
“It’s vital that businesses, particular in the hospitality and tourism sector, get the support they need to overcome the battering they’ve had in the past year. I’ll do all I can as the regional Member of Senedd to make the case for the railway.”
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