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.
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