Cirque du Soleil files for creditor protection amid COVID-19 woes

Cirque du Soleil files for bankruptcy amid coronavirus

Cirque du Soleil files for creditor protection, terminates 3,480 jobs

Cirque's application for bankruptcy protection will be heard on Tuesday by the Superior Court of Quebec.

Cirque du Soleil Entertainment Group filed for bankruptcy protection after the coronavirus pandemic forced it to close shows around the world, bringing one of the best-known brands in live performance to its knees.

"For the past 36 years, Cirque du Soleil has been a highly successful and profitable organization", says Daniel Lamarre, president and CEO of Cirque du Soleil Entertainment Group. "I am sure that at the end of the process, which should culminate in mid-September, I will have an owner". Investissement Québec will act as a debt provider.

In a statement, Cirque du Soleil said it has entered into a purchase agreement with its current shareholders, including a mix of investors from the United States, Canada and China.

Some $200m of this will take the form of a loan from the province of Quebec, where the firm is based. They allege they are owed almost $1.5 million for work.

It said it meant to rehire "a substantial majority" of terminated employees, business conditions allowing, once coronavirus-related shutdowns were lifted and operations could resume.

The company will now try to restructure while shedding about 95% of its staff.

Lamarre said there are "five to six groups" interested in acquiring the Montreal-based company, but they will have to meet the conditions of the offer now on the table, which requires Montreal to remain the company headquarters.

"If the court grants the initial order sought, the company will seek its immediate provisional recognition in the United States under Chapter 15 of the U.S. Bankruptcy Code in the United States Bankruptcy Court", the statement reads.

Cirque said its shareholders' offer was the "only fully documented and firm" offer received.

Cirque du Soleil, which ran shows in Las Vegas including Mystere and Michael Jackson ONE, hired advisers to explore debt restructuring options in March, people with knowledge of the situation said at the time.

For the 12-month period ended last September, Cirque would have generated revenues of approximately US$950 million, the rating agency Moody's calculated in a report published last March. Its profits were estimated at US$155 million.

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