A Quebec judge approved a plan giving lenders of Cirque du Soleil Entertainment Group control of the live performance company as it prepares to relaunch some of its shows.
“The transaction has been green-lighted,” Cirque spokeswoman Caroline Couillard said in an emailed message. “All parties can move forward, finalize and sign contracts and paperwork.”
The decision Tuesday positions the creditors’ group, including Toronto-based Catalyst Capital Group Inc., to take the driver’s seat in determining what Cirque will look like in a post-COVID world. Until the closing of the deal, which is expected to happen around Nov. 6, the board is running the company, according to Couillard.
While some minor details are still being ironed out, Cirque shareholders including TPG, China’s Fosun International Ltd. and Caisse de Depot et Placement du Quebec, the province’s pension fund, will see their investment wiped out when the deal closes. TPG bought a majority stake in 2015.
First-lien creditors, owed more than US$900 million as of March 31, will wind up with virtually all of the equity. The group leading the bid has said it plans to inject US$375 million of new capital into the Montreal-based company, which was forced shut down all of its 44 shows at the onset of the pandemic.
The creditors’ offer was the result of intense negotiations after existing shareholders led by TPG tabled an initial bid backed by the Quebec government. Creditors rejected that offer, which would have left them with a 45% equity stake.