Quebec Gives Loan to Cirque’s Owners, Hopes to Buy Them Out

(Bloomberg) -- Quebec’s government said it agreed to provide as much as $200 million to help relaunch debt-laden Cirque du Soleil Entertainment Group.

The support, which was announced by Economy Minister Pierre Fitzgibbon during a press conference, will come as a loan to shareholders, a spokeswoman for the Cirque said.

The loan comes with a clause allowing the government to buy the stakes owned by non-Quebec shareholders at some point, Fitzgibbon said. Cirque’s owners include TPG, the Caisse de Depot et Placement du Quebec and Shanghai-based Fosun International Ltd. The money is to help in the company’s recapitalization process.

“As soon as TPG or Fosun want to sell, we will be the buyer, or else there’s a date when we can buy,” he said.

Cirque needs to address more than $900 million of senior loans after it was forced to cancel shows early in the pandemic.

Fitzgibbon said the money will be used to get the global entertainment company back on its feet, and not to pay holders. (The parties have also agreed on a debt burden for the company that’s “much lower” than current levels, he added.)

Buyers Circle

“It’s a very complex process. In the coming weeks we’ll see shareholders make a proposal,” Fitzgibbon said. Other potential investors will also be able to come up with offers, he said.

“The existing owners have a plan to relaunch the Cirque, they came to us, we said, ‘Yes, we will help you, here are the conditions,’” the minister said. “During that time, other buyers may surface. There will be a process, and we will see who’s the buyer, who wins.”

Cirque founder Guy Laliberte said on the weekend he’s preparing an offer for the company, three months after selling his remaining 10% stake to the Caisse. Laliberte said that his plan would keep Cirque as a “mainly” Quebec organization and maintain headquarters in the province.

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