Cirque du Soleil, considered one 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 current buyers, 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 staff.
The involvement of Investissement Québec, within the type of $200 million US in debt financing, requires the buyers to decide to maintaining the corporate’s headquarters in Montreal.
In assertion made early Monday afternoon, Cirque du Soleil mentioned Quebec Superior Courtroom will hear its software for chapter safety tomorrow. If granted, the corporate mentioned it is going to additionally search chapter safety in the US.
The circus firm was pressured to cancel dozens of productions all over the world since March, when public well being tips started barring reside leisure occasions.
“For the previous 36 years, Cirque du Soleil has been a extremely profitable and worthwhile group,” president and CEO Daniel Lamarre mentioned within the assertion launched Monday.
“Nonetheless, with zero revenues because the pressured closure of all of our reveals as a consequence 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 reside spectacles it is recognized for all over the world.
It was estimated the corporate owed collectors round $900 million US, which means that they had efficient management of the corporate.
The present Quebec authorities, headed by a nationalist centre-right social gathering, got here to energy on a pledge to do extra to stop international takeovers of the province’s marquee manufacturers.
In Could, because the Cirque’s monetary place appeared more and more shaky, Economic system Minister Pierre Fitzgibbon expressed issues about the potential for collectors searching for liquidity.
He mentioned 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 mentioned on the time, was incumbent on the buyers assembly plenty of political necessities, along with the pledge to maintain the pinnacle workplace in Montreal.
Underneath the phrases of the deal, the buyers are additionally committing to sustaining key firm management positions in Quebec and rehiring as many Quebec-based staff as doable. These are on high of monetary commitments that embrace:
- $15 million US in monetary assist for laid-off staff.
- $5 million US to settle excellent contracts (particularly Quebec-based contractors).
- Refunds for reveals cancelled due to the pandemic.
The bid by the prevailing buyers is what’s referred to as a stalking horse settlement, which means it units a minimal worth and sale situations for the corporate.
Different events have 45 days to desk competing affords, a course of that might be supervised by the courtroom.
Lamarre instructed 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 situations, Fitzgibbon mentioned.
The listing of different potential buyers is prone to embrace 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 acknowledged his curiosity in as soon as once more having an possession share.