The Welsh Government has injected a further £10m into the International Convention Centre Wales (ICC Wales) in Newport to support its debt reduction as it seeks to move to breakeven following the impact of the pandemic.
The Welsh Government has a 50% equity stake in ICC Wales through a joint venture company with Celtic Manor Ltd.
With a £10m matched investment from Celtic Manor, ICC Wales’ debt with NatWest has been reduced by £17m to just under £29m. As well as reducing financing costs, the remaining debt has been restructured with the bank on more favourable terms. The balance of the £20m is being invested in the business to support its trading position.
ICC Wales opened in September 2019, but like all venues, it suffered a protracted closure due to the Covid-19 pandemic, which started in March 2020. The venue, which is attracting events from around the world and last year welcomed more than 90,000 delegates, was built at a cost of around £83.7m, with the backing of a £51.5m loan from NatWest.
Prior to the formation of the joint venture company, the Welsh Government provided a loan to fund the design and planning phase of the project. This loan, together with rolled-up interest and fees, was converted into equity at financial close of the joint venture.
The Welsh Government said the liability implications on its balance sheet from the NatWest loan to ICC Wales were known from the outset. The joint venture company was established in 2017.
The Welsh Government’s equal contribution to debt reduction has resulted in its balance sheet liability from the borrowings of ICC Wales being reduced by £8.5m. As an accounting procedure, that £8.5m can now be released back into the Cardiff Bay administration’s budget.
Responsibility for operating ICC Wales rests with the Celtic Manor.
Most Read
In March last year, the Welsh Government provided a separate £2.7m support package to ICC Wales.
On its latest financial support, the Welsh Government said: “We have invested £10m in ICC Wales over the past 12 months, but because this was for debt reduction, it resulted in credit back, making it a net investment of £1.5m.
"ICC Wales had to close because of the Covid pandemic only six months after it opened, and the convention sector has been slow to recover. But as the sector continues its recovery, we are confident ICC Wales has a strong future that will bring economic benefits to the region.
“We invested in ICC Wales to grow business tourism in Wales, and as the market recovers, we are confident that more and bigger events will come to ICC Wales, bringing considerable benefits to the south Wales economy.”
A spokesperson for ICC Wales said: “It always takes time to establish a new international convention centre in what is a very competitive marketplace. Building the profile and business of ICC Wales was also impacted severely by the Covid pandemic, which hit the meetings industry hard just six months after the venue opened.
“Following this difficult start, business is picking up strongly, with the venue welcoming more than 90,000 delegates to events in 2024, generating an economic impact for the region of £65.8m — a figure that is projected to rise to £88.1m per annum by 2027. As well as boosting the visitor economy, business events at ICC Wales elevate the global profile of the destination and support key sectors like fintech, medtech, cyber, and food and drink.
“The fact that the two partners in the joint venture, Welsh Government and Celtic Manor Resort, have invested £20m between them into the company this year shows the confidence and support that shareholders have in the future performance of ICC Wales.”
ICC Wales directly employs 70 staff. w