Cirque du Soleil Deal With Lenders Approved by Canada Court

(Bloomberg) -- A Canadian court approved Cirque du Soleil Entertainment Group’s agreement with its secured lenders, setting in motion a battle for the live performance company that was brought to its knees after the coronavirus pandemic forced it to close down shows.

At a hearing Friday morning, a judge in Quebec signed off on an offer valued at more than $1.2 billion by a committee of creditors that includes existing first lien and second lien lenders.

The proposal also includes $375 million in new capital. The creditors’ stalking-horse bid sets the floor price for other interested parties, which must present their competing bids by Aug. 18. An auction will then be held on Aug. 25.

“From the beginning, we have been focused on bringing forward a solution that can ensure the company’s long-term success,” Gabriel de Alba, a partner at Catalyst Capital Group Inc., one of the biggest creditors, said in a message. “The Cirque has tremendous opportunity as not just an entertainment company, but as a socially responsible, global lifestyle brand.”

The judge dismissed a request by a minority group of second-lien lenders who sought to extend the deadline for new bids by two weeks, arguing that the current timeline may discourage some potential buyers.

Under the stalking-horse bid approved by the court, second-lien lenders, which have a lower priority of repayment than the senior debt, were offered warrants to buy Cirque equity.

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