There is a battle brewing for management of amusement giant Cirque du Soleil, The Post has learned.
On Monday, the circus entertainer filed for insolvency protection from Canada, mentioning the coronavirus, that has compelled it to cancel its own displays across the entire world — making it unable to pay its own debts. The firm — famous for the fire-eating, high-flying acrobatic displays — told the court it affirms a strategy to get a group of shareholders headed by David Bonderman’s TPG to purchase it from bankruptcy for $400 million.
However, a bunch of lenders holding two-thirds of their senior loan — such as Los Angeles Dodgers’ co-owner Todd Boehly — are gearing up to oppose this strategy, as it provides TPG along with other equity shareholders a commanding 55 percent stake whilst leaving them with a minority interest plus only pennies on the dollar to get their own loans.
The counteroffer, to be introduced to the courtroom on Tuesday, involves the vast majority of those firm’s $1.2 billion debt to be exchanged for management of the business, and also for $375 million in fresh loans to assist Cirque return on its feet.
The bargain would wipe out TPG present ownership whilst departing Cirque with $675 million in debt.
TPG’s plan would depart Cirque with only $275 million in debt. However, the creditors aim to assert the TPG-led program will appreciate the entertainment giant in only $727 million, even while their strategy will appreciate it at $1. 275 billion, sources said.
The lenders will also be independently balking at the idea of providing possession back to the very same investors that led to Cirque’s passing by overloading it with debt. TPG directed the group of investors who purchased Cirque in 2015 for $1.5 billion — leaving it fair to the tune of $1.2 billion, in which it stood half a decade later when the coronavirus hit.
Usually, bankruptcy judges do not accept restructuring strategies not encouraged by creditors holding the vast majority of their senior loans,” sources said.
However, TPG’s program also contains a $200 million investment in the Quebec government in exchange for your firm remaining in Montreal and consenting to employ back as numerous Québec-based employees as you can.
Cirque was a source of pride because of its own hometown of Montreal because it was shaped as a drifting group of street performers headed by Guy Laliberté at the 1980s.
The creditors are also expected to vow to maintain Cirque in Montreal.
Driving the dueling bids is your anticipation that Cirque will last to become a show-stopper after the pandemic finishes.
The provider boasted about its own pre-COVID-19 victory in its own bankruptcy filing Monday. “Within the last couple of decades, Cirque du Soleil has been responsible for nearly all the best 10 live shows in Las Vegas… accounting for nearly half of their complete vegas box office earnings.”