A group of financial lenders is angling to acquire Cirque du Soleil in a possible bankruptcy reorganization — and they may partner with its charismatic co-founder, The Post has learned.
The cash-strapped circus — which was forced in March by the coronavirus pandemic to shutter dozens of shows in cities worldwide — on Monday got a proposal from creditors to inject $300 million into Cirque du Soleil under a bankruptcy restructuring that also would convert the company’s $900 million in debt into a 100-percent ownership stake, according to sources close to the situation.
Under the terms of the proposal, the lenders will rehire nearly 4,700 circus workers — or 95 percent of the company’s payroll — who were summarily fired in March, and will maintain the company’s headquarters in Montreal, sources said.
Angling to restart productions in the coming months, the creditors believe they can restore operations to breakeven profitability by the end of next year, partly by broadcasting its spectacular acts on TV and online, sources said.
The creditor group has meanwhile been in talks with Guy Laliberte, the former fire eater who, with a ragtag group of street performers, co-founded Cirque du Soleil in the early 1980s. Laliberte became a billionaire when he sold the company to a group led by private-equity firm TPG in 2015 — a debt-fueled deal that left Cirque du Soleil vulnerable to the coronavirus crisis, according to critics.
Now, one source close to the talks said Laliberte remains a “free agent” and hasn’t yet committed to a partnership with the creditor group. Nevertheless, late last month the 60-year-old clown said in an interview that after “careful consideration” he was looking to revive the circus “with a great team.”
“Its revival will have to be done at the right price. And not at all costs,” Laliberte said.
The bidding group, which is being advised by Houlihan Lokey, hopes to get court approval to buy Cirque du Soleil out of bankruptcy by the end of August.
The creditors include Canada-based Catalyst Capital, as well as US investment firms Shenkman Capital, Providence Equity’s Benefit Street Partners and CBAM. The latter is controlled by former Guggenheim Partners President Todd Boehly’s Eldridge Industries, which owns more than 20 percent of the Los Angeles Dodgers, as well as Dick Clark Productions, The Hollywood Reporter, and film distributor A24.
The offer came in response to a Monday deadline for bids set by the Montreal-based circus, whose animal-free productions ditch lions, tigers and bears in favor of cutting-edge acrobatics, lively musical soundtracks and a storytelling approach.
Other possible bidders include buyout firm TPG. Quebec’s government, loosely partnered with the Texas-based buyout firm, said last week it would invest $200 million to keep Cirque operating and in the city under certain conditions.
Nevertheless, insiders note the creditors have an advantage in the process, as Cirque du Soleil defaulted on a March 31 interest payment and is now in a forbearance period. Accordingly, any deal must be approved by creditors, who have the power to put the company into bankruptcy.
“They can’t get rid of us without paying us,” a source in the lending group said.
The creditors are making their move in part to stop TPG — which last month threw J. Crew into Chapter 11 after saddling it with debt — from reasserting itself and profiting from the bankruptcy, sources said. In March, Cirque du Soleil placed several of its worldwide trademarks into a different subsidiary. Last month, TPG lent $50 million against those trademarks to give it a bigger say in a restructuring process.
The creditor group on Friday issued an emergency loan to Cirque du Soleil replacing the $50 million in TPG funding, sources said.
Cirque du Soleil didn’t immediately respond to requests for comment.
{ SOURCE: New York Post
