Cirque du Soleil took everyone by surprise by confirming yesterday the existence of advanced discussions between it and its creditors with a view to preparing a new financial arrangement within the framework of procedures to avoid bankruptcy.
Meeting before the Superior Court of Quebec, counsel for the parties suggested that if such an agreement were to come to fruition, it would serve as a new proposal to initiate the auction process put in place under the Arrangement Act with the creditors of the companies (LACC).
On June 29, Cirque announced that it had gone to court to protect itself from its creditors. The same day, an auction process was set up, and Cirque shareholders immediately presented a proposal for US $ 300M.
Of this amount, US $ 200 million was drawn from a loan granted by Investissement Québec to the group of Cirque shareholders. Remember that this group is made up of the Texan fund TPG Capital, the Chinese firm Fosum and the Caisse de depot et placement du Quebec.
Details of the new montage in preparation were not revealed during the virtual audience, which was attended by more than 130 people; mostly lawyers, investors, creditors and journalists.
However, noting this new development, judge Louis-Joseph Gouin granted the parties until Tuesday, July 14, to reach an agreement and to make known their new proposal for an arrangement. Everything indicates that the latter would dismiss the initial purchase agreement presented by the shareholders on June 29.
Catalyst Capital, which dominates the group of creditors interested in the takeover, declined to share elements of the proposal under negotiation. But according to a source close to the company, the current shareholders of Cirque – as long as they imagine – should in no case hope for a significant participation in a future version of Cirque. “They may want to talk to us. I understand they want it. But they shouldn’t expect anything. ”
Claiming to speak for the benefit of all the companies interested in the Cirque takeover, the lawyer for Quebecor sought to make the Court aware of certain particularly restrictive elements of the process put in place. Among them is the ban on any offeror to “communicate freely with creditors”.
When listening, the judge replied that he was just as “concerned about the integrity of the process” put in place by the controller. He said he wished to examine certain elements of the proposed framework, but first wanted to encourage the completion of the discussions started between the Circus and the group of creditors.
After asking to receive the new agreement by July 14, the judge invited all the parties to a next hearing, scheduled for July 17.