Cirque du Soleil files for bankruptcy protection after months-long closure | Venture

  • Cirque du Soleil files for bankruptcy protection after months-long closure | Venture

Cirque du Soleil files for bankruptcy protection after months-long closure | Venture

Cirque du Soleil announced on Monday it is filing for bankruptcy protection and cutting thousands of jobs as the world's most famous circus troupe seeks to survive the coronavirus pandemic.

"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.

IQ would act as a debt provider, lending US$200 million as part of the US$300 million, while the shareholders acquire substantially all of the company's assets for a combination of cash, debt, and equity.

Application under the CCAA will be heard by the Quebec Superior Court Tuesday and the company will also seek its immediate provisional recognition in the USA under Chapter 15. Its profits were estimated at US$155 million. The Quebec government's investment and lending arm, Investissement Quebec (IQ), is involved as a lender, the company said.

"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.

"However, with zero revenues since the forced closure of all of our shows due to COVID-19, management had to act decisively to protect the company's future". "I look forward to rebuilding our operations and coming together to once again create the magical spectacle that is Cirque du Soleil for our millions of fans worldwide", he concluded.

It was estimated the company owed creditors around $900 million United States, meaning they had effective control of the company.

The current Quebec government, headed by a nationalist centre-right party, came to power on a pledge to do more to prevent foreign takeovers of the province's marquee brands.

The firm said it had entered an agreement under which its existing shareholders will take over Cirque's liabilities and invest $300m (£244m) in the business.

Cirque du Soleil was founded in 1984 by a group of circus performers in the picturesque village of Baie-Saint-Paul, north east of Quebec City.

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.