Cirque du Soleil, a single of Quebec’s most internationally recognizable brand names, submitted personal bankruptcy safety on Monday pursuing months of meagre revenues due to the fact of the COVID-19 pandemic.
A team of existing investors, with backing from the Quebec government’s expense wing, Investissement Québec, by now has a deal in area to choose about the enterprise, inject $300 million US and provide monetary help for 3,500 laid-off personnel.
The involvement of Investissement Québec in the kind of $200 million US in debt financing requires the buyers to commit to preserving the firm’s headquarters in Montreal.
In assertion manufactured early Monday afternoon, Cirque du Soleil mentioned Quebec Top-quality Court docket will listen to its application for individual bankruptcy security tomorrow. If granted, the business claimed it will also seek out bankruptcy defense in the United States.
The circus enterprise was compelled to terminate dozens of productions close to the environment due to the fact March, when public well being pointers began barring stay entertainment functions.
“For the previous 36 a long time, Cirque du Soleil has been a hugely profitable and lucrative firm,” president and CEO Daniel Lamarre claimed in the assertion unveiled Monday.
“However, with zero revenues since the compelled closure of all of our demonstrates due to COVID-19, administration had to act decisively to secure the firm’s future.”
Greatly indebted ahead of pandemic
Even in advance of the pandemic struck, Cirque du Soleil was intensely indebted pursuing a string of main acquisitions aimed at diversifying its enterprise operations beyond the lavish reside spectacles it is really regarded for all-around the globe.
It was approximated the enterprise owed creditors all over $900 million US, this means they had powerful manage of the business.
The current Quebec govt, headed by a nationalist centre-appropriate get together, came to ability on a pledge to do a lot more to reduce overseas takeovers of the province’s marquee brands.
In Might, as the Cirque’s monetary situation appeared more and more shaky, Economy Minister Pierre Fitzgibbon expressed considerations about the risk of creditors trying to get liquidity.
He said Investissement Québec would back a recapitalization approach by the circus company’s 3 important shareholders: Texas-based TPG Funds, Chinese agency Fosun and Quebec pension fund manager the Caisse de depot et placement.
That funds, he said at the time, was incumbent on the buyers conference a quantity of political demands, in addition to the pledge to hold the head workplace in Montreal.
The strings attached
Under the terms of the deal — a stalking-horse bid that requires court docket approval — the investors are also committing to preserving important company leadership positions in Quebec and rehiring as lots of Quebec-based mostly personnel as probable.
These are on prime of monetary commitments that include things like:
- $15 million US in money support for laid-off staff.
- $5 million US to settle remarkable contracts (specially Quebec-primarily based contractors).
- Refunds for shows cancelled since of the pandemic.
Cirque du Soleil was established in 1984 by a team of circus performers in the picturesque village of Baie-Saint-Paul, north east of Quebec Metropolis.
Person Laliberté, one of the original performers, turned the troupe into a stay enjoyment giant, sooner or later environment up beneficial productions in Las Vegas.
He offered his managing stake for an estimated $1.5 billion in 2015, but has a short while ago expressed fascination in at the time again possessing an ownership share.