Cirque du Soleil, one in every of Quebec’s most internationally recognizable manufacturers, filed for chapter safety on Monday following months of meagre revenues due to the COVID-19 pandemic.
A bunch of present traders, with backing from the Quebec authorities’s funding wing, Investissement Québec, has already tabled a bid to take over the corporate, inject $300 million US and supply monetary assist for 3,500 laid-off employees.
The involvement of Investissement Québec, within the type of $200 million US in debt financing, requires the traders to decide to protecting the corporate’s headquarters in Montreal.
In assertion made early Monday afternoon, Cirque du Soleil stated Quebec Superior Court docket will hear its utility for chapter safety tomorrow. If granted, the corporate stated it is going to additionally search chapter safety in america.
The circus firm was pressured to cancel dozens of productions around the globe since March, when public well being pointers started barring stay leisure occasions.
“For the previous 36 years, Cirque du Soleil has been a extremely profitable and worthwhile group,” president and CEO Daniel Lamarre stated within the assertion launched Monday.
“Nonetheless, with zero revenues for the reason that pressured closure of all of our exhibits as a result of COVID-19, administration needed to act decisively to guard the corporate’s future.”
Closely indebted earlier than pandemic
Even earlier than the pandemic struck, Cirque du Soleil was closely indebted following a string of main acquisitions geared toward diversifying its enterprise operations past the lavish stay spectacles it is recognized for around the globe.
It was estimated the corporate owed collectors round $900 million US, that means that they had efficient management of the corporate.
The present Quebec authorities, headed by a nationalist centre-right celebration, got here to energy on a pledge to do extra to stop overseas takeovers of the province’s marquee manufacturers.
In Might, because the Cirque’s monetary place regarded more and more shaky, Financial system Minister Pierre Fitzgibbon expressed considerations about the potential of collectors searching for liquidity.
He stated Investissement Québec would again a recapitalization plan by the circus firm’s three main shareholders: Texas-based TPG Capital, Chinese language agency Fosun and Quebec pension fund supervisor the Caisse de depot et placement.
That cash, he stated on the time, was incumbent on the traders assembly quite a few political necessities, along with the pledge to maintain the top workplace in Montreal.
Below the phrases of the deal, the traders are additionally committing to sustaining key firm management positions in Quebec and rehiring as many Quebec-based employees as potential. These are on high of monetary commitments that embody:
- $15 million US in monetary assist for laid-off employees.
- $5 million US to settle excellent contracts (particularly Quebec-based contractors).
- Refunds for exhibits cancelled due to the pandemic.
The bid by the prevailing traders is what’s generally known as a stalking horse settlement, that means it units a minimal worth and sale circumstances for the corporate.
Different events have 45 days to desk competing presents, a course of that can be supervised by the courtroom.
Lamarre advised Radio-Canada 5 different teams have expressed curiosity within the firm. They too would profit from Investissement Québec’s financing, if they comply with its circumstances, Fitzgibbon stated.
The listing of different potential traders is prone to embody the corporate’s co-founder and former CEO, Man Laliberté, who bought his controlling stake again in 2015 for a reported $1.5 billion US.
Laliberté has publicly said his curiosity in as soon as once more having an possession share.