Council plans to offload 19-hall exhibition space to help pay bills.
The Birmingham NEC, home to a number of industry events including Jewellery & Watch Birmingham, Autumn Fair and The National Wedding Show, is to be sold off by the city council.
Principal objectives of the proposed sale are to secure an investor who shares the vision and strategic ambitions of the NEC Group and to maximise the proceeds for Birmingham City Council.
It is thought that the sale will help the council pay a £1 billion bill to settle thousands of equal pay cases from women employees who were paid less than other workers, mainly men, for doing equivalent jobs.
Reports from March 5 claimed the council has borrowed money to help fund the settlements, but the Department for Communities and Local Government won’t let it take on any more loans.
Council officials said that bringing the NEC Group under private ownership would enable the business to take full advantage of its growth opportunities and reach the next stage of its development.
The NEC Group is a vitally important contributor to the West Midlands economy, delivering an economic impact of over £2 billion a year and supporting some 29,000 jobs in the region.
Julie Driscoll, portfolio director for Jewellery & Watch Birmingham at i2i Events Group said: "We view the proposed sale of the NEC as an extremely positive move for Jewellery & Watch Birmingham. One of the main objectives is to find a buyer who shares the vision for the NEC as a world-class home for live events and to further invest in its next stage of development.
"Already from 2016, our buyers and exhibitors will be able to enjoy more after show entertaining and networking with a new onsite attraction, Resort World, which includes a new a 4-star hotel, restaurants and casino. These developments will further enhance the show’s profile as the UK’s leading Jewellery and Watch event."
The City Council plans to invite potentially interested buyers to participate in a pre-qualification process while sale preparations are finalised.
Sir Albert Bore, leader of Birmingham City Council, said a key purpose of the City Council investing in establishing the NEC Group more than 30 years ago was to drive economic development and regeneration. With this achieved, 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.
“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, while achieving the other principal objectives of enabling the Group to achieve its potential and growing economic impact,” he said.
In structuring a transaction, the City Council intends to ensure that the existing uses of the exhibition centre, International Convention Centre and two arenas (LG Arena and National Indoor Arena) are preserved.
The City Council also intends to retain claw-back rights over certain land at the main NEC site, so ensuring that it preserves potential future development value from a highly attractive site that will be adjacent to the Birmingham Interchange HS2 station.
Birmingham City Council and the NEC Group have retained Gleacher Shacklock LLP as financial advisers and Wragge & Co LLP as legal advisers in relation to the sale process.
Since the opening of the National Exhibition Centre in 1976, with seed-corn investment from the City Council, the NEC Group has broadened its business and through the subsequent openings of the NEC Arena (1980), the International Convention Centre (1991) and the National Indoor Arena (1991).