(Montreal) Just over three months after canceling its 44 shows and laying off almost all of its employees, Cirque du Soleil finally sheltered from its creditors, learned The Press.
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The announcement was made Monday noon by the president and chief executive officer of Cirque Daniel Lamarre in a video sent to employees and managers of the company. In a statement released on Monday, Cirque confirmed that it had filed for creditor protection under the Companies’ Creditors Arrangement Act (CCAA) to restructure its capital structure.
The application filed under the CCAA will be heard on Tuesday by the Quebec Superior Court. “If the Court grants the initial order requested, the Company will request its immediate provisional recognition in the United States under chapter 15 of the” US Bankruptcy Code “, wrote the Cirque.
In its request, Cirque du Soleil announced that it had “concluded a type purchase agreement” Stalking Horse » (“Purchase Agreement”) with its current shareholders TPG, Fosun and the Caisse de depot et placement du Quebec (the “Shareholders”), as well as with Investissement Québec as lender, under which the Shareholders would acquire substantially all of the Company’s assets, for a combination of cash capital, debt and equity, and would establish two funds totaling US $ 20 million to provide additional assistance to affected employees and independent contractors of Cirque du Soleil ” .
“Under the proposed Purchase Agreement, Shareholders will inject US $ 300 million of cash into the restructured business to support a successful restart, partially compensate affected employees and Cirque du Soleil partners, and assume certain obligations in arrears of the Company, in particular with regard to ticket holders affected by the cancellation of shows. From this sum of US $ 300 million, Investissement Québec will provide debt financing of US $ 200 million to support the proposed acquisition. “
“The Purchase Agreement provides that Cirque du Soleil secured creditors will receive an unsecured debt of US $ 50 million, in addition to a 45% equity interest in the restructured business, as well as the repayment of a interim loan from certain senior lenders for US $ 50 million. The proposed Agreement also provides, as part of the injection of US $ 300 million in cash, the creation of a dedicated employee fund of US $ 15 million to provide financial assistance to employees, as well as a dedicated fund of US $ 5 million to independent contractors to pay the Corporation’s obligations to independent artisans and artists. “
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