Cirque du Soleil has filed for creditor protection as the company grapples with financial hardships during the ongoing novel coronavirus pandemic and looks to restart its business.
The Quebec government's investment and lending arm, Investissement Quebec, is providing US$200 million of the US$300 million in new capital proposed by the TPG-led group. The filing said that the move was "in response to vast disruption and forced show closures as a result of the COVID-19 pandemic".
The firm said it had entered an agreement under which its existing shareholders will take over Cirque's liabilities and invest $300m (£244m) in the business. Under the acquisition, two funds for $20 million will be set up to provide monetary relief for employees and contractors impacted by the Chapter 15 filing.
The CCAA is a Canadian Federal Act that allows large corporations to restructure their finances and avoid bankruptcy, while allowing creditors to receive some form of payment for amounts owed to them. However, this does not affect the artists and show staff of the resident shows in Las Vegas and Orlando, as they are expected to resume before the rest of the company's shows elsewhere.
Cirque is drowning in almost $1 billion in debt, according to CNN Business.
It said it meant to rehire "a substantial majority" of terminated employees, business conditions allowing, once coronavirus-related shutdowns were lifted and operations could resume.
The stakeholders and debt provider will acquire "substantially" all of Cirque de Soleil's assets in a deal made up of cash, debt, and equity. Cirque du Soleil also produces six shows in residence in Las Vegas, including the world-renowned "O" and "The Beatles LOVE", which were also shut down by the pandemic.