City of Zurich saves Kongresshaus as new majority shareholder
In order to save the Kongresshaus Zürich AG, the city of Zurich becomes its main shareholder. The municipal council approved a loan of up to CHF 4.5 million on Wednesday evening. This averts the risk of the Kongresshaus becoming over-indebted and, according to the financial plans, a return to profitability is possible.
The Kongresshaus is important for the city of Zurich: According to the City Council, a bankruptcy of the Kongresshaus Zürich AG would not only result in the loss of around 480 jobs. Such a move would also have far-reaching negative consequences for the economic recovery of the tourism and events industry.
The municipal council saw this on Wednesday: It approved the rescue requested by the city council with 99 yes to 22 no votes. AL and SVP spoke out against the loan.
Stefan Urech (SVP) spoke of a “long tragedy” with many rescue operations and millions that disappeared in the building walls. He was convinced that congresses could also take place without a “state congress center”.
Once again, the city council is asking the municipal council for money for the congress center, criticized Moritz Bögli (AL). “We are afraid that this will be a bottomless pit.”
Bögli pointed out the complicated structures with three interlinked institutions: Kongresshaus Zürich AG (conference operator), Tonhalle-Gesellschaft (concert operator) and Kongresshaus-Foundation (house owners). Instead of sticking to the AG, these structures should finally be adjusted.
However, the majority of the Council spoke out in favor of the requested restructuring of the AG. Otherwise, the house would be empty for a long time, employees and know-how would be lost and all those who had already booked it would look for another location, said Severin Pfluger (FDP).
But the majority is also pushing for structural adjustments. The city council is now expected to present an overview with variants for the future of the AG when the lease expires in 2028. A corresponding accompanying postulate of the SP was referred to the city council with 76 votes to 13 and 30 abstentions.
The Kongresshaus Zürich AG faces bankruptcy in March 2021. The threat of insolvency was averted thanks to a CHF 1.9 million loan approved by the city council.
Because when the Corona pandemic slowed down the trade fair and event industry, the house on the shore of Lake Zurich was already weakened: the congress center and the concert hall had been renovated and renovated from 2017, but due to construction delays, operations could only be resumed a year later in September 2021.
In addition to the budgeted deficit due to the construction-related closure, there were also the losses caused by the pandemic. Those responsible put these at around five million francs for the years 2021 and 2022.
A so-called “harmonica” is now to be carried out for the renovation. The first step is a capital cut. The 5,000 shares with a nominal value of 1,000 francs are reduced to 100 francs. The share capital is thus reduced from CHF 5 million to CHF 500,000.
In a second step, the share capital will be increased again to 5 million Swiss francs. Each shareholder can purchase nine additional shares for CHF 100 each for each share already held. The city of Zurich is guaranteeing this planned increase with the 4.5 million loan that has been promised. If no other shareholders follow suit, they could buy all the new shares.
As a result, the city becomes the majority shareholder in Kongresshaus Zürich AG. This also ensures that they can influence further development, the city council emphasized in its instruction. He does not rule out a later sale of the shares.
It will only become clear in late autumn whether the Kongresshaus accordion will really come about. The General Assembly of Kongresshaus Zürich AG will decide on the capital cut and increase. This is currently scheduled for November 16th. Before that, the municipal council decision must be legally binding. This is the case at the earliest after the 60-day referendum period has expired.
More on the subject: