PE-backed Cirque du Soleil files for bankruptcy protection, cuts 3,500 jobs as Covid-19 lays business low


The coronavirus crisis has pushed the world-famous Cirque du Soleil into bankruptcy protection, with the private equity-backed business set to slash 3,500 jobs.

AltAssets reported last month that the contemporary circus and entertainment company was considering debt restructuring options including a potential bankruptcy filing, with Covid-19 having shuttered its shows and leaving it struggling to deal with a $900m debt pile.

Cirque du Soleil said it has entered into a “stalking horse” purchase agreement with its existing shareholders TPG, Fosun, and Caisse de dépôt et placement du Québec, as well as Investissement Québec as a debt provider, which would see them acquire substantially all of the company’s assets.

They would inject $300m of liquidity into the business, including establishing two funds totaling $20m to provide additional relief to impacted employees and independent contractors, a statement from the company said.

The offer will serve as the stalking horse bid in a sale process for Cirque du Soleil.

Company CEO Daniel Lamarre said, “For the past 36 years, Cirque du Soleil has been a highly successful and profitable organization.

“However, with zero revenues since the forced closure of all of our shows due to COVID-19, management had to act decisively to protect the Company’s future.

“The purchase agreement and SISP provide a path for Cirque to emerge from CCAA protection as a stronger company.

“The robust commitment from the sponsors – which includes additional funds to support our impacted employees, contractors and critical partners, all of whom are important to Cirque’s return – reflects our mutual belief in the power and long-term potential of our brand.”

Private equity major TPG Capital and Fosun International closed a $1.5bn deal to buy a majority stake in Cirque du Soleil back in 2015.

Caisse de dépôt et placement du Québec also invested in the company in 2015 and increased its stake earlier this year, after buying out founder Guy Laliberté.

Copyright © 2020 AltAssets


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