Does anyone know how much Stagecoach charged First for the sale of the class 483 units?

[Midnight Sun]

Does anyone know how much Stagecoach charged First for the sale of the class 483 units?

 

[fgwrich]

I would hazard a guess at probably nothing. If stagecoach had listed them as Franchise Assets, the should / would have transferred with the franchise.

 

[Roast Veg]

Liabilities more like

 

[Speed43125]

Does anyone know how much Stagecoach charged First for the sale of the class 483 units?

I believe they paid the exorbitant sum of £1 for all the trains.

‘Wagons Roll’ Towards Island Line Independence. Isle of Wight News: Island Pulse: Community Info

Those idiots at First! They could have bought a fleet of Concordes for that sort of money!

 

[43096]

I believe they paid the exorbitant sum of £1 for all the trains.

‘Wagons Roll’ Towards Island Line Independence. Isle of Wight News: Island Pulse: Community Info

Those idiots at First! They could have bought a fleet of Concordes for that sort of money!

That is what Stagecoach paid in the first place for them. I'd suggest fgwrich's view of "nothing" is probably correct for the SWT to SWR transfer.

 

[Speed43125]

That is what Stagecoach paid in the first place for them. I'd suggest fgwrich's view of "nothing" is probably correct for the SWT to SWR transfer.

Ah sorry. Misunderstood the question. My bad

 

[Energy]

If they are franchise assets I believe they go with the franchise, if technically owned by Stagecoach then it is usual in this type of situation to sell them for £1. I think the former is what happened as it would make more sense for Stagecoach to put them as part of the franchise than to have them as an asset of Stagecoach.

 

[Taunton]

It's an accounting convention that depreciation of assets is down to £1 rather than zero, so if still in use they are still listed positively as assets. It's also common to thereafter sell them around at this notional £1 value as well. My hunch would be that it was £1 for each vehicle in the asset register, rather than £1 for the whole fleet. The complete spares holding was probably sold for £1 as well.

You can of course sell them for more - the scrapman may give much more than £1 for them, which forms part of the profits of the business, and if they still have a genuine value they can be sold for more as well.

 

[SeanG]

But I imagine that is stagecoach had sold them to the scrap man, it would not have reflected well on them as a company. "Stagecoach spits out dummy and sabotages winner of the franchise after it loses"

 

[Domh245]

They are franchise assets, and page 731 of the franchise agreement gives a definitive answer:

Description of Primary Franchise Asset	Commitment not to de-designate	To Transfer to Successor Operator at Nil value
10 x Class 483 vehicles as operational rolling stock in 2-car formation (Units 483004, 483006, 483007, 483008 and 483009).		Yes - to transfer at nil value.
Unit 483002 consisting of two cannibalised Class 483 vehicles as Spares.		Yes - to transfer at nil value.

 

[Fudgefrog]

It's an accounting convention that depreciation of assets is down to £1 rather than zero, so if still in use they are still listed positively as assets. It's also common to thereafter sell them around at this notional £1 value as well. My hunch would be that it was £1 for each vehicle in the asset register, rather than £1 for the whole fleet. The complete spares holding was probably sold for £1 as well.

You can of course sell them for more - the scrapman may give much more than £1 for them, which forms part of the profits of the business, and if they still have a genuine value they can be sold for more as well.

You sell valueless things for £1 for contractual reasons - you need ‘consideration’ for a contract to be enforceable by the person receiving the assets, and consideration doesn’t need to reflect the true or fair value of the goods as long as it is objectively of some value. Without the enforceable contract, there can be questions about whether or not ownership actually transferred.

 

[fgwrich]

They are franchise assets, and page 731 of the franchise agreement gives a definitive answer:

Description of Primary Franchise Asset	Commitment not to de-designate	To Transfer to Successor Operator at Nil value
10 x Class 483 vehicles as operational rolling stock in 2-car formation (Units 483004, 483006, 483007, 483008 and 483009).		Yes - to transfer at nil value.
Unit 483002 consisting of two cannibalised Class 483 vehicles as Spares.		Yes - to transfer at nil value.

Thanks @Domh245 That confirms what I thought they were, franchise assets at nil transferable value.

 

[cjmillsnun]

I believe they paid the exorbitant sum of £1 for all the trains.

‘Wagons Roll’ Towards Island Line Independence. Isle of Wight News: Island Pulse: Community Info

Those idiots at First! They could have bought a fleet of Concordes for that sort of money!

Slightly off topic but BA paid full price for 5 of its Concorde fleet. The £1 each was the write down value of the 2 British built unsold “white tail” aircraft and was because BA agreed to take on half of all Concorde support costs (the U.K. half). This was when BA decided to market Concorde to make it profitable.

 

[Helvellyn]

BA also spent millions to upgrade those two whitetails to their specification before taking delivery, which is one of the reasons they were bought for £1 - it was known a lot was needed to be spent to get them up to the same specification.

It is why BA had been looking at secondhand A380s over the last few years but never bought any. Sellers wanted too much compared to what BA valued them at given they knew they would have to spend millions more to get them to the same specification as their own twelve.

But back on topic. As has been pointed out the 483s were a franchise asset so stay with the TOC. It will be interesting to see if the 484s have to become a franchise asset being the direct replacement for the 483s.

 

[Gag Halfrunt]

The 484s will be leased, so they can't be franchise assets.

Or will the lease itself be a franchise asset transferred automatically to the next franchisee?

 

[Clarence Yard]

A rolling stock lease can't be a franchise asset. A rolling stock lease arrangement is a "key contract" which the DfT has to approve.

Franchise assets are usually transferred from the operator to the sucessor operator at nil book value. Any asset that isn't listed usually has to be the subject of a negotiation as to the purchase price.