Thu, 06 Mar 2014 | BUSINESS SALE
Birmingham City Council has put the NEC Group up for sale in an attempt to balance its books.
The NEC Group is a company that runs four Birmingham-based venues: The National Exhibition Centre (NEC), one of the UK's leading conference venues from which the group takes its name; the International Convention Centre; the LG Arena; and The National Indoor Arena. The council has been the major shareholder of the NEC Group since its formation in 1976.
Having fallen on hard times, Birmingham City Council now says that it cannot meet the level of capital expenditure and annual investment required to run and grow the NEC Group. The council also needs the income from the sale to pay off its extensive equal pay liabilities; reported to be just over £1 billion, these settlements are for women who were paid less by the council than their male colleagues who did equivalent jobs.
The NEC Group, as well as running the four venues, has also branched out over recent years. The group now offers catering services, operates as a ticket agency (The Ticket Factory), and provides third party venue management consultancy.
The company is also building the Birmingham Resorts World conference facility at the NEC site. The two sites will be sold on a leasehold basis, with the NEC site on a long 100-year plus lease and a shorter, perhaps 25-year deal, for the ICC and NIA facilities.
The group contributes around £2 billion every year to the West Midlands economy and also employs nearly 30,000 staff.
Council leader Sir Albert Bore said: “An open sale process has been identified through extensive strategy review as the way to achieve full value for this internationally renowned asset, while achieving the other principal objectives of enabling the group to achieve its potential.
“The NEC Group has reached a point in its evolution where it needs to be able to adopt the financial disciplines of a private, rather than a council-owned company to enable the next stage of strategic development.”
NEC chief executive Paul Thandi added: "The city council has been a fantastic shareholder. But we need to realise our ambitions through a different capital risk profile." He stated that private investment in the group would help it grow as a global brand.
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