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Cirque du Soleil seeks debt relief

Entertainment firm also makes deal with shareholders by Compiled by Democrat-Gazette Staff From Wire Reports | June 30, 2020 at 2:02 a.m.

MONTREAL -- Cirque du Soleil filed for creditor protection in Canada on Monday while it develops a plan to restart its business amid the pandemic.

The creator of many of the most popular shows in Las Vegas on Monday blamed the "immense disruption and forced show closures as a result of the covid-19 pandemic."

The Montreal-based circus arts show company temporarily suspended its productions around the world in March because of the new coronavirus outbreak.

Cirque du Soleil also announced the termination of approximately 3,480 employees previously furloughed in March.

Application for court protection under the Companies' Creditors Arrangement Act will be heard by the Quebec Superior Court today and the company will also seek its immediate provisional recognition in the U.S. under Chapter 15.

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The company, which grew from a troupe of Quebec street performers into a global live entertainment giant, entered into a so-called stalking horse purchase agreement with its top shareholders -- TPG, Shanghai-based Fosun International Ltd. and Caisse de Depot et Placement du Quebec. The Quebec government's investment and lending arm, Investissement Quebec, is involved as a lender, the company said.

Under the terms of the proposal, the sponsors will inject $300 million of liquidity into the restructured business to support a successful restart and assume some of Cirque's liabilities, the company said.

Cirque du Soleil said the sponsors' bid includes an intent to rehire a substantial majority of the terminated employees, business conditions allowing, when its operations can resume.

The company added that given that its resident shows in Las Vegas and Orlando are expected to resume before the rest of the other shows, the artists and show staff of the resident shows division are not affected.

Cirque du Soleil shows were canceled in Las Vegas; Austin, Texas; Chicago; Houston; New Orleans; Salt Lake City; Montreal; Boston; Tel Aviv; Meloneras, Spain; Munich; Costa Mesa, Calif.; Denver, and the Australian cities of Melbourne, Adelaide and Perth.

The crisis hit the 36-year-old company just as it emerged from a string of acquisitions, which helped it diversify from its original acrobatic shows but also put it deeper into debt.

It bought Blue Man Productions in 2017, followed by children's entertainment company VStar Entertainment Group in 2018. Last year, it added Works Entertainment and its troupe of magicians called the Illusionists to its portfolio before striking a separate deal to make feature-length films with the company that co-produced the hit The Lego Movie.

Information for this article was contributed by staff members of The Associated Press and by Paula Sambo and Sandrine Rastello of Bloomberg News.

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