Cirque du Soleil To Sell Itself To Lenders In Order To Stay Afloat
It looks like Canadian based company Cirque du Soleil may have come up with a strategy to stay afloat after finding itself in financial crisis due to the COVID 19 shutdown. According to a recent report in the New York Post, the company has accepted an offer to sell itself to its lenders. This is causing a shakeup within the company as it means current private equity owner TPG Capital would be out.
The circus giant, which is usually known for dominating the Vegas Strip and who also has a venue at Disney Springs where it STILL hopes to premiere its latest production Drawn to Life in the Fall, had to declare bankruptcy earlier this year after the pandemic caused their productions to close worldwide.
According to the report in the Post, the offer from the lenders was approved in the middle of the night on Wednesday. It forgives roughly $800 million of Cirque’s $1.1 billion in outstanding loans in exchange for ownership while leaving its current owners out.
The next step of the plan includes a restructuring includes $375 in new spending and a $20 million fund to help out of work employees and contractors. The circus is holding firm in its commitment to stay headquartered in Quebec where it was founded back in the 1980’s. The restructuring plan will be submitted to the Canadian courts today. A judge is then expected to open up the door to rival bidders who have superior offers. This includes current lender TPG.
This arrange has not been without its fair share of drama and intrigue. Cirque originally filed for bankruptcy protection and agreed to sell itself back to its current owners including TPG and the Quebec government in exchange for $400 million. However, this came with a restructuring plan on TPG’s part that angered lenders (including Los Angeles Dodgers co-owner Todd Boehly and equity firm Catalyst Capital Group because it would shift them to a minority stake in the company in exchange for its debt being wiped out. These lenders went to the bankruptcy judge to complain that they were never consulted.
Rumor had it that the lenders were also trying to oust Cirque CEO Daniel Lamarre and the board for their loyalty to their current owners. On July 1st, a Superior Court Judge met with Cirque’s layers to discuss the controversy and in an open statement on Wednesday, the company hinted that it would be switching gears and going with the lender’s plan instead as it agreed to keep operations in Canada and would help fund staff and contractors.
As of going to print Quebec’s government is said to NOT be a part of the deal. Nor is the company’s founder Guy Laliberte. “Catalyst and the creditor group are committed to respecting the Cirque’s history while aligning the company for a bright future. Quebec’s bright artistic and innovative spirit will be central to our plans,” Gabriel de Alba of Catalyst Capital, a lead lender, said in a statement.
If you’ve been following along with MickeyBlog then you know that Cirque du Soleil currently has a venue on the West Side of Disney Springs – Disney Worlds’ downtown district. Drawn to Life can best be described as an acrobatic journey. It tells the story of Julie a girl who discovers an unexpected gift from her father who is a Disney Animator – an unfinished animation. This is the catalyst for Julies inspiring quest guided by a surprising pencil and filled with childhood Disney memories!
Check out a clip of the project here:
Advance reservations are strongly recommended. Guests may purchase tickets through Cirque du Soleil here. Please Note: By clicking this link, you will be directed to a third-party site not controlled by disneyworld.com where a different privacy policy and terms of use will apply.
You may also purchase tickets by calling (855) 473-7783 or (702) 352-0221. Guests under 18 years of age must have parent or guardian permission to call.
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