Cirque de Soleil filed for bankruptcy, cuts 3,500 jobs amid pandemic crisis

Cirque du Soleil files for creditor protection amid COVID-19 woes

Cirque du Soleil files for creditor protection amid COVID-19 woes

The COVID-19 pandemic has hit Cirque du Soleil Entertainment Group and the worldwide entertainment industry in an unprecedented way.

The company said that it has brought in zero revenue since COVID-19 forced the French-Canadian circus group to shut down all of its performances, including six in Las Vegas and suspend 44 of its live shows internationally back in March.

Under a Canadian Act, similar to Chapter 11 bankruptcy law in the USA the company is filing under the Companies' Creditors Arrangement Act (CCAA) as the COVID-19 pandemic forced the famed circus to cancel shows and lay off its artistes. However, in a new statement released to the Orlando Sentinel, Cirque du Soleil has indicated that their all-new production for Disney Springs, titled "Drawn to Life", could potentially still debut this Fall.

As expected, the company said in its filing announcement the refinancing move was "in response to enormous disruption and forced show closures as a result of the COVID-19 pandemic".

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.

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Under the bankruptcy filing, Cirque du Soliel has entered into a stalking horse purchase agreement with its stakeholders TPG, Fosun, and Caisse de depot et placement du Quebec. He continued to say the commitment from the sponsors - which includes additional funds to support impacted employees, contractors, and critical partners - reflects the company's long-term potential of the brand. They will also receive repayment of a $50 million interim loan.

The firm said it plans to rehire "a substantial majority" of employees who are to lose their jobs, as it restructures and develops a plan to restart its business once coronavirus shutdowns are lifted and production is able to restart across the world.

According to CNN, the company is almost $1 billion in debt.

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.

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