Cirque du Soleil files for bankruptcy protection

Cirque Du Soleil

The entertainment company says the Quebec Superior Court will hear its application for bankruptcy protection on Tuesday, and it will seek bankruptcy protection in the USA, per Cirque's press release.

"For the past 36 years, Cirque du Soleil has been a highly successful and profitable organization", president and CEO Daniel Lamarre said in the statement released Monday. "I am sure that at the end of the process, which should culminate in mid-September, I will have an owner".

The involvement of Investissement Québec in the form of $200 million USA in debt financing requires the investors to commit to keeping the company's headquarters in Montreal.

A group of shareholders - which includes private equity firm TPG, Chinese conglomerate Fosun and Investissement Quebec - will initially acquire company assets in exchange for providing $300 million in liquidity as the restructuring venture seeks other investors.

TPG, Fosun, and Caisse have been investors in Cirque du Soleil since 2015, they said. To help stem the financial loss, Cirque has laid off roughly 3,500 employees.

It said it meant to rehire "a substantial majority" of terminated employees, business conditions allowing, once coronavirus-related shutdowns were lifted and operations could resume.

The company also said the artists and show staff of resident shows in Las Vegas and Orlando, which are expected to resume before the rest of its shows, would not be impacted by the lay offs.

"Everyone was waiting for us to take shelter from our creditors", said Lamarre, who added he doesn't believe the company waited too long before filing for creditor protection.

The company's existing secured creditors will get $50 million of unsecured, takeback debt as well as a 45% equity stake in the restructured company. The company has not specified a strategy for if and when it can resume shows.

For the 12-month period ended last September, Cirque would have generated revenues of approximately US$950 million, the rating agency Moody's calculated in a report published last March.

$5 million U.S. to settle outstanding contracts (especially Quebec-based contractors).

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