Remarks by Jürgen Roters, Mayor of the City of Cologne
and Chairman of the Supervisory Board of Koelnmesse, at the
annual press conference on July 1, 2010, 11:00 a.m.,
in the Entrance South at the Cologne exhibition center
Check against delivery!
Major factors affecting the economic situation of our trade fair company are now having an enormous impact. Some of these factors are consequences of the state of the overall economy, but they are also due in part on decisions made in the past, particularly concerning the leasing contract for the Northern Halls and the Congress Center.
On the other hand we have witnessed a tremendous feat by the Executive Board and the work force, who fought to maintain the company's position among the leaders in the trade fair business worldwide, with good, successful trade fairs, but also with drastic measures for boosting efficiency, particularly in this situation. Koelnmesse needs assistance with this balancing act. As the Supervisory Board Chairman and the Mayor of the City of Cologne, I can definitely tell you: Koelnmesse will receive this support! Because the trade fair business is an essential economic factor for the city and the region. And because there must be an end to the current discussion that is tarnishing Koelnmesse's image among its most important customers - be they the exhibitors and visitors of imm cologne, photokina, Anuga or gamescom. Trade fairs are nothing if not communication. Negative messages are more damaging in this sector than in any other business.
Last December, the Executive Board explained to the Supervisory Board its assessment of the situation, its plans for the future, and what we can achieve with a combined effort in the coming years, in great detail and on a clearly comprehensible, realistic basis. The Supervisory Board immediately gave a green light for all restructuring and efficiency measures, which are designed to deliver tens of millions of euros per year in savings. In addition, we evaluated initial assistance measures and have also implemented some of them. Together with management - and in part with the help of external experts - we will now reach a decision regarding a growth and investment program for further securing our future.
So our supporting measures are already in action. All of you have already been informed in detail about the agreement concerning cash pooling which was reached in May. This has meanwhile been approved by the district government and signed by the participants. If we consider the city and Koelnmesse as affiliated companies for a moment, it is clear that we did what any good company would do: We pooled liquid funds for our mutual benefit, which secures the financial means for Koelnmesse until at least the end of 2012. The company has a credit line of ¤50 million at its disposal, making use of a funding option approved by the EU in response to the financial crisis, which poses no legal concerns.
Further relief will come - so we hope - as a result of the renegotiation of the contracts with the lessor of the Northern Halls (Oppenheim-Esch-Fund), as called for by the European Commission.
After four rounds of inconclusive talks attended by representatives of the property company Köln-Messe 15 bis 18 GbR and the City of Cologne, which were led by Dr. Norbert Walter-Borjans, the city treasurer, the administration has now announced to the lessors of the halls that it will take the next step of obtaining an appraisal of the current market value of the new trade fair halls. Using this as a basis, we intend to then present the shareholders with a purchase offer. I want to make something perfectly clear: Expected profits that investors will not reap due to the termination of the current leasing contract, as required by the European Commission, are not the concern of the City of Cologne.
The City of Cologne expects the fund shareholders to comply with the Commission's requirements by taking part responsibly in the specification of concrete terms for the contractual agreement that will then take the place of the current leasing contract.
I'd like to emphasize once again that the European Commission has announced that there must be a resolution of the situation that has resulted from the disputed contracts within a time period of two months. This explicitly does not mean that a substantially revised contract must be finalized by the end of that period. To prevent further legal action before the Court of Justice of the European Union, which could possibly involve a fine, the Commission will be satisfied for now if the disputed lease agreement is terminated. As has been the case so far, we will ensure during all future negotiations that Koelnmesse's existing right to use the halls will remain in effect and that the trade fair operations are safeguarded. It is certain that the next major trade fair scheduled to take place in these halls will be gamescom, in August.
We shareholders want to offer additional support by commissioning external consultants to revise and evaluate the strategic options for the future development of Koelnmesse. The Executive Board has already approved a number of internal restructuring measures, which are currently being implemented. In close cooperation with the shareholders, the Executive Board is planning to soon issue a call for tenders for the consulting contracts.
In these times, which are economically difficult for the city, we want to support Koelnmesse as one of the guarantors who are securing the strength of our business and its future success. The shareholders and the Executive Board members alike want to proceed with caution in choosing the means and measures they will use to do this, however. This is why the process has not yet been concluded. One thing is certain, though: Cologne needs its trade fair company! I don't need to remind you of the billion euros in turnover that is generated by Koelnmesse's activities every year in Cologne alone, and the 11,000 full-time jobs these operations have created in our city. And even if these arguments have been used time and again, they get right to the crux of the matter: Koelnmesse's future is a piece of Cologne's future as a center of business. If we correctly pave the way forward today, the future will be bright. The operative business, the net results of the organizer's efforts, continues to be positive. So Koelnmesse shouldn't hesitate in the slightest to compare itself with competitors at the national and international levels.