The Circus is deprived of income since mid-march due to the health crisis caused by the pandemic COVID-19; it has cancelled its 44 shows across the world and laid off approximately 3500 people.
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July 17, 2020 19h55
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The proposal of the creditors of the Cirque du Soleil has taken another step
Julien Arsenault
The canadian Press
MONTREAL — It will be necessary to submit an offer whose value is greater than US $ 1.5 billion to hope to delight the Cirque du Soleil to its creditors in the framework of the planned auction in the restructuring process, to which Quebecor will finally not.
The group of secured lenders of the entertainment company, led by the toronto firm Catalyst Capital Group, saw on Friday its agreement to seek approval of the Quebec superior Court in order to be considered as a submission of the primer, which lays down the minimum requirements for the submission of proposals, if any rivals.
Valued at more than US $ 1.2 billion, the offer proposes to put up to US $ 375 million without government support – at the disposal of the company. Two funds totalling US $ 20 million) will also be created to pay the sums due to the ex-workers and craftsmen. The agreement provides a commitment for the maintenance of the headquarters of Cirque in Montreal for at least five years.
“This new improved offer is obviously good news for the Circus and its stakeholders”, emphasized mr. Guy Martel, a lawyer for the entertainment company, in raising the curtain of the hearing, which took place virtually in front of the judge Louis Gouin.
The magistrate has also rejected the request of a lawyer representing the lenders of the second lien to extend by two weeks the deadline to submit purchase proposals.
According to what is provided for in the purchase agreement entered into between the Circus and Spectacle Bidco, the entity comprised of the company’s creditors, rival offerings will need to be fully funded. Their value will need to be at least US $ 1.5 million to the agreement reached with the creditors. It will also inject an equal amount of money in the Circus.
The Circus is deprived of income since mid-march in the wake of the sanitary crisis caused by the pandemic COVID-19. In addition to having cancelled its 44 shows across the world, the company has fired some 3,500 people at the end of June when it was placed under the protection of the Act creditors arrangement companies (CCAA).
“From the beginning, we tried to propose a solution that can ensure the long-term success of the company”, commented the general director and partner of Catalyst, Gabriel de Alba, in a statement sent by e-mail, where he hailed the decision of the judge Gouin.
The offers of the creditors differs, and the arrangement of approximately 420 million US $ previously entered into with the existing shareholders, the fund texan TPG Capital, the chinese company Fosun and the Caisse de dépôt et placement du Québec. By focusing on a loan of US $ 200 million offered by the State of quebec, they wanted to inject US $ 300 million in the company.
In exchange for a debt restructuring, the creditors would have obtained 45 % of the company, as well as an unsecured debt of US $ 50 million. They opposed, however, to this scenario, since they would be reimbursed for only a fraction of what was owed to them.
Contrary to lenders, the commitment of the shareholders in respect of the maintenance of the head office in Quebec was not set in time.
After announcing Thursday evening that it would not participate in the auction, the conglomerate Quebecor has not intervened with the superior Court, Friday. The quebec-based company, however, has reached out to the creditors by expressing its interest to participate in the relaunch of the Circus. Quebecor did not provide more details Friday.
The co-founder of Cirque, Guy Laliberté, who has sold his last shares not later than February, has also shown interest in the place of the company. The billionaire, however, has not said if he was to file an offer in good and due form.
Important Dates for the auction:
- July 27: Deadline for interested parties to indicate their interest.
- August 18: deadline to submit a proposal.
- 25 August: auction, if necessary.
- 30 September: expected Closing of the transaction.
