Quebec’s government will back the winning bidder for Cirque du Soleil Entertainment Group with loans if the new owners of the live entertainment company can live by certain conditions, says the province’s economy minister.

The government of Premier Francois Legault is taking an interest in the recapitalization of Cirque, which was forced to stop performing shows when the COVID-19 pandemic hit. Legault’s administration wants to ensure the cash-strapped company remains based in Quebec and that it emerges with a much lighter debt burden, Economy Minister Pierre Fitzgibbon told Bloomberg News in an interview.

Cirque grew from a troupe of Quebec street performers into a global entertainment giant, but acquisitions and a US$1.5 billion buyout by private equity left it with large debts. Fitzgibbon described Cirque’s capital structure as “a disaster” with US$900 million in senior loans.

Creditors already have effective control of Cirque, he said, and may need to convert loans into equity.

Last month, Legault’s government agreed to lend as much as US$200 million to Cirque’s top shareholders -- TPG, Shanghai-based Fosun International Ltd. and Caisse de Depot et Placement du Quebec -- to help restart the company. But the money can’t be drawn unless that shareholder group emerges from the recapitalization process with control, Fitzgibbon said.

If another investor group wins, the government is prepared to offer loans on similar conditions, Fitzgibbon said. When the restructuring is done, the government wants its debt to be the only remaining debt in the company, he added -- “no more disaster of a capital structure.”

“We have had people asking us if the loan will be available, given we have signed up with TPG. I said, ‘I don’t have to get up and give you the details right now, but if you win and accept our conditions, yes,’” Fitzgibbon said.

Fitzgibbon, a former business executive who was elected for the first time in 2018, spearheads the Quebec government’s efforts to assist key companies. Shortly before the pandemic, he helped lead the government’s side in negotiations that saw Bombardier Inc. extricate itself from a commercial jet venture with Airbus SE. The Quebec government wound up with a 25 per cent stake in the Airbus A220 program.

The minister estimated Cirque would need around US$300 million to restart and keep operating for the next 18 to 24 months. The terms of the TPG deal would see shareholders inject US$100 million in addition to Quebec’s US$200 million, he said. A spokesperson for Cirque did not immediately respond to request for comment.

The government deemed it would be “foolish” to lend money directly to Cirque before the recapitalization process is complete, Fitzgibbon said.