Llangollen Railway PLC asks bank to appoint receiver

Breaking news ...

Llangollen Railway has this afternoon (Monday) issued a formal announcement about its future.

It reads: "It is with great regret the directors of Llangollen Railway PLC have had to take the reluctant step of inviting the bank to appoint a receiver.

"The company’s accounts show pre-tax losses of £330,601 in 2018, £329,175 in 2019 and £258,804 in 2020 (pre-audit).  

"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 claims against the company are compelling and are in excess of £250,000 in total.  There is no prospect of meeting these liabilities, even over an extended period.

"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 licencing, 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 commercial@llangollen-railway.co.uk and details will be passed to the receiver. Anyone wishing to contact the Trust, please do so at the above e-mail address also."

Comments ...

Clwyd South MP Simon Baynes commented: “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.”

Llangollen town councillor Stuart Davies said: "I am deeply saddened to hear the news today about Llangollen Railway going in to administration.

"I am calling on the County the local MS and Welsh Govt to step in to help save this valuable tourist attraction and employer for Llangollen. Not only is it a superb asset to the town it is traditionally one of its bigger employers.

"Historically its apprentice scheme was one of the best, teaching young people to be skilled maintenance people and engineers. I have always been a champion of apprentice schemes having had the good fortune to be able to go through one with the National Coal Board in the 60s.

"Recently Llangollen Town Council was pursuing a £160k project that would have brought no employment to Llangollen. We need Welsh Government and Lottery funding to save jobs and the Railway which is part of what Llangollen is today."

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."

Clwyd South MS Ken Skates said: "This is very sad news for all involved. However, the infrastructure will remain in place and I am confident that this will not be the end for the railway."

North Wales MS Mark Isherwood commented: "This is dreadful and concerning news about a wonderful heritage railway.

“The loss of this railway would not only be devastating for the army of volunteers who support it and the railway’s employees, but also for the wider visitor economy in Llangollen and throughout the Dee Valley.

“I have offered to assist the Railway in any way I can.”