Council puts NEC Group up for sale
BIRMINGHAM City Council is to seek offers for the NEC Group as it looks to secure finance to pay legal claims over equal pay totalling more than £1bn.
The local authority announced today that following a strategic review of the group, which is wholly-owned by the council, it had been decided the group’s position could be strengthened through private ownership.
However, the sale comes with conditions. Principal of these is to ensure that the bidder shares the vision and strategic ambitions of the group in order to maximise the proceeds for the city council.
“Bringing the NEC Group under private ownership will enable the business to take full advantage of its growth opportunities and reach the next stage of its development,” said the council in a statement.
The NEC Group is considered a vitally important contributor to the West Midlands economy, bringing in around £2bn a year and helping to support around 29,000 jobs.
“Securing and enhancing this economic impact is a key objective for Birmingham City Council,” added the statement.
“A strong NEC Group attracts further economic activity to the region. This has been evidenced strongly through securing the £140m plus investment into Resorts World Birmingham by Genting UK. The NEC Group’s position would be strengthened through private sector ownership, and this should act as a catalyst for further investment in the region.”
The city council will now invite potentially interested buyers to participate in a pre-qualification process while sale preparations are finalised.
The council and the NEC Group have retained Gleacher Shacklock as financial advisers and Wragge & Co as legal advisers in relation to the sale process.
In structuring a transaction, the council said it intended to ensure that the existing uses of the National Exhibition Centre, International Convention Centre and the LG Arena and National Indoor Arena were preserved. It said this would secure the profile of Birmingham and the wider West Midlands as a global centre for live events.
The city council will retain claw-back rights over certain land at the main NEC site to ensure it maintains a stake in future schemes such as the possible development of an HS2 station, dubbed Birmingham Interchange.
Sir Albert Bore, leader of Birmingham City Council, said: “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. In doing so, economic impact and job creation can be preserved and enhanced.
“An open sale process has been identified through an extensive strategic review process as the way to achieve full value for this internationally-renowned asset, whilst achieving the other principal objectives of enabling the group to achieve its potential and growing economic impact.”
