Shropshire Star

Llangollen Railway hits out at NatWest for pulling the plug on its accounts

Llangollen's heritage railway has been given a kick in the teeth as a major bank announced it was pulling the plug on its accounts.

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Llangollen Heritage Railway

The railway's trust has been going through the official appeal process following the decision by NatWest. But the bank will not budge from its view - that the railway was re-inventing itself in another guise after its operating arm was declared insolvent.

In March 2021 the Llangollen Railway PLC announced it was insolvent and not legally able to continue to trade with debts of £350,000.

However the charitable trust remained solvent and its volunteers worked tirelessly behind the scenes to get the railway back on the right track.

Those heading up the railway say the trust was in existence long before the Railway PLC - which went into administration last year - was set up, has always been a separate entity and is in no way a "Phoenix" organisation.

Thankfully the trust is now working with another High Street bank, Barclays, to ensure its future.

The volunteer board at Llangollen Railway has been working hard to put the tourist attraction in North Wales onto a financially sound and sustainable footing.

Finance director Phil Freeth is calling for answers from NatWest.

'They seem to think we are now what the bankers call a 'phoenix company', he said. "That is simply not the case.

"A phoenix is when a company deliberately goes bust, and the directors restart the next day having bought the assets for a song. The trust has been in business for 45 years and we spent a small fortune buying back 'our assets' in the administrators' online auction of the trading company's assets, the majority of which were lost to other owners.

"That is not what we did, apart from anything else the current management board is entirely new. Yes, it stepped in to take over a failing company when the previous board resigned en masse, but it took action to stem the losses immediately, took insolvency advice as a responsible board should and then took the necessary action to put it into administration."

Phil, who worked in banking for more than 40 years and rose to the position of a senior commercial manager, is at pains to point out there is no financial risk to the bank.

"The railway has not knocked NatWest for any money," he said. "Quite the reverse - the account is in credit, and we paid bank charges the same as any other business.

"All we wanted was for the arrangements to continue on a no-borrowing basis.

"I understand the bank can decline to operate any account, but the bank's decision makes no sense commercially.

"Everyone accepts the railway is an asset to the town in terms of providing employment, and a general boost to Llangollen's economy and that of North Wales.

"I think it's instructive Barclays were prepared to take the account on the same basis, even though they had no prior knowledge of us.

"Lots of people, businesses, and organisations have helped us turn the railway around.

"It is beyond disappointing NatWest chose not to join us on that journey, which threatened to scupper our plans.

"They have refused to engage with us in any meaningful way and need to justify their stance."

NatWest has been asked to comment.