Cirque du Soleil CEO: We will remain for many years to come
Cirque du Soleil Entertainment Group agreed to back a purchase agreement from a group of its secured lenders, setting the minimum acceptable bid in its court-supervised sales process.
A committee of creditors that includes existing first lien and second lien lenders struck a deal with Cirque to acquire substantially all of the entertainment company’s assets in exchange for the cancellation of existing debt, Cirque said in a statement Thursday, confirming a Bloomberg story.
Cirque is scheduled to present the new restructuring plan, which also includes as much as $375 million in new capital, to a Quebec court on Friday. If the agreement is approved by the judge, it will serve as the new stalking-horse bid for the company, setting the floor price for other parties.
Other potential bidders would have until Aug. 10 to present competing proposals, and an auction would happen no later than Aug. 17.
“The cooperation of the creditor group has been extraordinary to achieve our objective to recapitalize and revitalize the Cirque,” Gabriel de Alba, a partner at Catalyst Capital Group Inc., one of the biggest creditors, said in a message. “This is an important transaction and we are excited to bring back the artisans, trades and team members once it is approved.”
TPG Group Out
The offer will replace a stalking-horse bid made in June by Cirque shareholders TPG, China’s Fosun International Ltd. and Caisse de Depot et Placement du Quebec. Creditors had immediately rejected that offer, which would have left them with a 45 per cent equity stake.
The lenders’ proposal replicates parts of the TPG bid by establishing two funds with a total of US$20 million for employees and independent contractors. It also includes provisions to keep the headquarters in Montreal.
“When the Cirque was forced to shut down amid the pandemic, we stood with the company to stabilize the business and developed a plan for the company to re-emerge with its core values and history intact,” a spokesperson for the TPG shareholder group said in an e-mailed statement. “We are pleased to see that the creditors have incorporated these key undertakings into their bid -- including commitments to Quebec and dedicated funds for affected employees and contractors.”