MONTREAL, Quebec (CelebrityAccess) — Theatrical giant Cirque du Soleil announced that it has filed for protection from creditors under Canadian bankruptcy law.
The company, which operates multiple productions around the world, announced Monday it was attempting to refinance its debt “in response to immense disruption and forced show closures as a result of the COVID-19 pandemic.”
Like much of the entertainment world, all of Cirque du Soleil’s 44 productions have been on hiatus since March, when the pandemic began to impact the industry.
As a part of the company’s proposed restructuring plan, Cirque announced that it has terminated the employment of approximately 3,480 employees who had previously been furloughed in March due to the COVID-19 shutdown.
Cirque also announced it has entered into a “stalking horse” purchase agreement with its existing shareholders, TPG Capital, Fosun, and and Caisse de dépôt et placement du Québec, as well as creditor Investissement Québec that would see the investors obtain all of Cirque’s assets fora combination of cash, debt, and equity, and would establish two funds totaling US$20 million to provide additional relief to impacted employees and independent contractors.
As part of the purchase agreement with creditors, Cirque would receive a $300 million infusion of cash to support a restart and provide relief for Cirque du Soleil’s affected employees and partners, and to assume certain financial liabilities currently held by Cirque.
The deal also stipulates that Cirque’s headquarters remain in Quebec. The company currently maintains its headquarters in Montreal.
“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,” said Daniel Lamarre, President and CEO of Cirque du Soleil Entertainment Group. “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. I look forward to rebuilding our operations and coming together to once again create the magical spectacle that is Cirque du Soleil for our millions of fans worldwide.”