Cirque du Soleil has reached an agreement with its creditors that will allow them to get their hands on the company’s assets as a debt settlement, its management said Thursday, adding that these creditors have the intends to maintain the headquarters in Montreal and create funds for laid-off employees and unpaid artisans.
This agreement between the creditors and the Circus, which has been operating under the protection of the courts since the end of June, suddenly rules out a proposal put forward in June by the current shareholders of the company in order to establish a kind of floor price in as part of the sales process and investment solicitation from interested buyers.
The creditors’ purchase agreement will be presented to the Superior Court on Friday, the Cirque said, so shaken by COVID-19 that it had to suspend dozens of shows around the world and lay off 95% of its staff in March, approximately 4,700 people, before laying off 3,480. At the time, its debt was estimated at nearly one billion US dollars.
The current shareholders of Cirque are the American fund TPG (60%), the Chinese group Fosun (20%), and the Caisse de dépôt et placement du Québec (20%). The three planned to reinject 300 million in the company, of which 200 million would have come from a loan from Investissement Quebec. In the press release presenting the creditors’ offer, Cirque does not mention this loan. However, the creditors keep the idea of a fund of 15 million for dismissed employees, a fund of 5 million for craftsmen, and the maintenance of the siege. In June, the Circus said the $ 15 million was targeting 3,480 laid-off employees.
We are pleased to see that creditors have incorporated these key commitments into their submission – including commitments to Quebec and funds for affected employees and contractors. ”
Headquarters continued for at least five years
According to the agreement obtained by The Canadian Press, however, the maintenance of the head office in Quebec seems fixed in time According to the Minister of the Economy, Pierre Fitzgibbon, it is “not necessarily surprising” that the creditors find themselves in a favorable position to acquire the assets of Cirque, given the debt of one billion US dollars. Asked to comment on the situation, Mr. Fitzgibbon said that his “concern was that the Cirque set out again on solid foundations and that we respect the fact that it is a society centered in Quebec, with decision-making power.” “If they respect all the conditions I had established with TPG, and it costs nothing to the government, I am the happiest Minister of the Economy in the world. ”
Other interested parties questioned whether the $ 200 million loans would be available in the event of a new counter-offer. “I always said yes, as long as [the terms of the loan] were met. “These terms are quite expensive, because” there is no question of the government losing money on this.