Photo: Valérian Mazataud The Duty
The Circus of the Sun, which we see here the top in the Old Port of Montreal, does not generate any revenue since its activities are paralysed because of the health crisis caused by the pandemic COVID-19
Private income since mid-march due to the pandemic of COVID-19, the Cirque du Soleil moves to protect itself from its creditors to restructure its debt and revive its operations through a purchase agreement entered into with, its current shareholders.
Announced Monday, the new results in the dismissal of 3480 employees who had been laid off in mid-march, when the entertainment company had canceled its 44 performances in the wake of the health crisis.
“You know, because of the proposal that is on the table, that the Circus is saved, explained its president and ceo, Daniel Lamarre, during a telephone interview. I am assured that at the end of the process, which should culminate in mid-September, I will have an owner. “
He, however, lamented the end of the employment relationship of thousands of employees with the company whose debt is 900 million US dollars.
Supported by the loan of 200 million US dollars offered by Investissement Québec, the fund texan TPG Capital (60 %) and the Caisse de dépôt et placement du Québec (20 %) will inject US $ 100 million additional in addition to to set up two funds totalling US $ 20 million to support the workers of the Circus, and to pay the freelancers who are still waiting.
There are always ” five to six groups interested in acquiring the company based in Montreal, said Mr. Lamarre, but they will have to meet at least the conditions of the offer currently on the table, which includes the maintenance of the headquarters in the metropolis.
“Everyone is waiting for, that we are protected from our creditors,” said the leader of the Circus, who believes, however, that the company has not delayed too long before calling the Law on arrangements with creditors arrangement act (CCAA).
In exchange for a restructuring of the debt, the creditors will receive an unsecured debt of 50 million US dollars in addition to owning 45 % of the Circus, which will curb the interests of existing shareholders. TPG would own, and 33 per cent, while Fosun and the Fund would each have 11 %.
The Circus has explained that the offer to its shareholders was the ” only fully-documented and firm received “.
With US $ 300 million, the company will be able to ride out the current storm until it can start to generate income, probably as soon as its permanent shows in Las Vegas and Orlando will be able to return.
“What people don’t realize is that they are talking about déconfinement, and businesses can resume their activities, while this is not our case,” said Mr. Lamarre. As long as we will not be able to relaunch our shows, we will not be able to recall our employees. “
For the 12-month period ending last September, the Circus would have generated revenues of approximately 950 million US dollars, had calculated the rating agency Moody’s in a report published last march. Its profits were estimated to be 155 million U.S. dollars.