The National Exhibition Centre Group is to be sold off as a council tries to cope with £1 billion of debts from equal pay claims.
Conservative estimates have suggested the group, including the NEC, LG Arena, International Convention Centre and National Indoor Arena in Birmingham, could be worth at least £300 million.
Birmingham City Council today confirmed it was seeking offers for the NEC Group, but a price has not been confirmed.
The group is said to bring more than £2 billion a year to the West Midlands economy and supports 29,000 jobs.
But the city council is being forced by a court to settle claims of thousands of women employees who were paid less than other workers, mainly men, for doing equivalent jobs. One law firm alone is said to have as many as 4,000 cases.
The city council has stressed it wants to ensure the current use of the exhibition centre, ICC and arenas are preserved.
The NEC was opened in 1976 using funding from the council and has evolved to host major events and concerts by some of the biggest performers in the world. The X Factor tour will be at the LG Arena later this month.
Birmingham City Council has been looking at selling off landmarks to settle the legal bills. Richard Taffler, professor of finance at Warwick Business School, said it’s ‘likely the NEC is probably only worth £300m’. A potential sale price has not yet been confirmed by the city council.
Sir Albert Bore, leader of the city council, today insisted the sites would be sold as leaseholds meaning no change of use would be allowed as the city sought to retain them as entertainment venues.
The Labour councillor said the council had ‘nurtured’ those assets for years but now needed private sector investment for the group’s plans for growth to become reality and to ensure the council’s future. Sir Albert stressed council taxpayers who had invested in those assets would see a return in the proceeds from the group’s sale being put into the council’s services.
Sir Albert said: “We’ve taken the decision to dispose of the group so its growth plans can be fulfilled.
“We’re disposing of the group in order to invest in other activities. The council taxpayer will get a return on this disposal.
“Some people might think this is sad. I’ve had an involvement with the NEC Group throughout the whole time I’ve been on the city council but I’m rather more concerned about delivering the future. What we should be really excited about is the growth of the NEC Group.
“A key purpose of the council investing in establishing the NEC Group more than 30 years ago was to drive economic development and regeneration.
“This has been achieved, but now 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.”
Martin Angle, chairman of the NEC Group, added: “The Group has weathered the challenging economic environment and has a clear vision for its future growth. We look forward to working with Birmingham City Council in preparing for this major step forward.”