Famed Montreal based circus show company, Cirque Du Soleil, has filed for bankruptcy protection at its Canadian headquarters.
The Coronavirus pandemic has forced the popular circus company to cancel off all of its shows while laying off its artists at the same time.
Cirque Du Soleil’s bankruptcy comes under the Canadian Act, which is quite similar to the US’s Chapter 11 law for bankruptcy. Hence, the company aims to file under the famous ‘Companies Creditors Arrangement Act (CCAA).
Sources claim that the Canadian based entertainment company stated that it has undergone a ‘stalking horse’ type of agreement that involves existing shareholders such as TPG Capital, Caisse de dépôt et placement du Québec, and the Fosun International Ltd.
Under this agreement, the company will overtake Cirque’s liabilities, while investing a whopping total of $300 million.
Similarly, as part of the grand investment deal, the government body called Investissement Quebec will also provide a staggering $200 million for debt financing.
CEO Daniel Lamarre claims:
‘With zero revenue since the forced closure of all of our shows due to COVID-19, the management had to act decisively to protect the Company’s future.’
Just recently in March, the circus company was forced to furlough a staggering 400 individuals, which totals up to about 95% of its entire workforce. Likewise, it also temporarily suspended many of its Las Vegas-based shows, a prominent tourist attraction for many visitors.
With so many workers being laid off, the company does however hope that the decision is a temporary one, or until closure rules regarding such shows are relaxed.
The Montreal based entertainment company further explained how its sponsors’ bid included an intent towards the rehiring of a majority of its terminated employees, whenever operations resume.
A recent report by CNN Business declared how the mega-company was drowning in debts that surpassed $1 billion.
Cirque du Soleil’s shows have not only been canceled in Las Vegas and New York but at other prominent destinations such as Austin, Chicago, Houston, Denver, New Orleans, Spain, Germany, and several famed Australian cities like Perth, Adelaide, and Melbourne too.