Cirque du Soleil’s creditors have won control of the financially troubled company.
Lenders to Cirque du Soleil Entertainment Group won control of the company in a U.S. court-supervised restructuring. The bid by the creditor group, which represents holders of about $760 million U.S. in debt and includes Toronto-based Catalyst Capital Group Inc., must still receive the approval of a Canadian court.
Lenders have said they plan to inject $375 million U.S. of new capital into the Montreal-based company that runs live circus shows around the world. The lenders plan to restart the live shows in 2021. Under a proposal, first-lien creditors that are owed more than $900 million U.S. end up with virtually all of the equity in Cirque du Soleil.
"We haven’t received a higher offer than that of our lenders," a Cirque spokeswoman said in a written statement.
Cirque du Soleil shareholders including TPG, China’s Fosun International Ltd. and Caisse de Depot et Placement du Quebec, will see their investment wiped out under the creditors’ plan. TPG bought a majority stake in Cirque du Soleil back in 2015.
The lenders have agreed to keep Cirque du Soleil’s international headquarters in Montreal for at least five years. They committed to setting up a $15 million U.S. fund to pay laid-off employees and another $5 million U.S. for contractors, according to court documents. There is no government money in the latest proposal.
Caisse de Depot, Quebec’s largest pension fund, spent $75 million U.S. in February to double its stake in the entertainment company to 20% -- an investment that it was forced to write off in June when Cirque du Soleil filed for bankruptcy protection
