Cirque du Soleil, the circus company that was once one of Quebec’s most successful businesses, filed for bankruptcy protection on Monday.
But Quebec’s major institutional investors have made a bid to secure the company’s future and keep it based in Montreal.
The company’s revenue flow was devastated by the pandemic, which forced it to halt dozens of productions around the world.
In a news release, the company said Quebec Superior Court will hear its application for bankruptcy protection tomorrow. If granted, the company said it will also seek bankruptcy protection in the United States.
“For the past 36 years, Cirque du Soleil has been a highly successful and profitable organization. However, with zero revenues since the forced closure of all of our shows due to COVID-19, management had to act decisively to protect the company’s future,” president and CEO Daniel Lamarre said in the statement.
As part of the restructuring plan, the company has entered into an agreement that will see it sold to an existing group of investors that includes Quebec’s pension fund manager, the Caisse de dépôt et placement du Québec.
The Quebec government’s investment wing (Investissement Québec) will provide $200 million in debt financing to help the purchase.
Under the terms of the deal, the group would take over Cirque’s liabilities and invest $300 million US. The deal, known as a stalking horse agreement, requires court approval.
The agreement also includes commitments to keep the company’s headquarters in Montreal and provide $15 million US in support to 3,500 employees who will be permanently laid off.
Cirque said it intends to rehire a “substantial majority” of the laid-off workers when business conditions improve.