The sale Silcox Motor Coach Company’s premises may have sent the operator into deeper financial difficulties from which it could not recover, the Western Telegraph reported.
Silcox operated a fleet of 65 coaches and buses and provided the vast majority of Pembrokeshire County Council’s school transport. The company collapsed in June, with 50 staff moving over to Edwards Coaches, which took over the school bus contract.
A report published by insolvency practitioners Kelly Burton and Joanne Wright from Wilson Field examined the collapse of the 134 year-old company.
The report detailed how New Inn Travel Group (NITG) became a shareholder in the business in 2015 and in July of that year, Silcox shareholders agreed the transfer of the coach company’s long-established Pembroke Dock base to NITG. Silcox moved to a leased building and part of the land was flattened and sold to Aldi, where the construction of the long-planned supermarket continues.
The report stated: “The directors believe that the relocation to alternative premises has had a detrimental effect on the business, as it lost its prominent location on a main road which resulted in significant reduction in customer footfall as clients found it difficult to find the company’s new office.”
Leasing a new building led to further cashflow issues, which were made worse by the withdrawal of a £100,000 overdraft facility. This, coupled with a breakdown in relations between NITG and Silcox directors, led to the decision being taken to seek a buyer for the business.
Negotiations with Excalibur Coaches Ltd reached advanced stages but could not be completed. This was followed by talks with Edwards Coaches, but a major issue arose that threatened the company’s future, as Silcox’s membership of the Bonded Coach Holidays (BCH) scheme came into doubt.
The scheme is designed to safeguard holiday makers’ money in the event one of its members ceases trading.
The company’s bond expired in May 2016 and, due to the financial difficulties, it was unable to renew it.
A period of grace regarding the BCH membership was granted while negotiations continued, but Edwards pulled out at the end of May. The operator decided that the liabilities which would be inherited from Silcox were too great.
The report also claimed that Pembrokeshire County Council had already approached Edwards about the possibility of taking over the schools service in the event that Silcox collapsed.
“This led to Edwards withdrawing any interest in acquiring the business, recognising that they were likely to pick up the council contracts by default, were no sale to proceed,” said the report.
