Due to the introduction of strict lockdown measures and caps on social gatherings, many events and venues had to be cancelled across Canada. One of those venues was Cirque du Soleil – which is now grappling with significant financial hardships as a result. However, there is always a light at the end of the tunnel, and this time its the Quebec government to the rescue.
Pierre Fitzgibbon, Quebec’s Economy Minister recently announced that the provincial government will be issuing a loan of up to US$200 million, which would eventually see the province take over the entertainment company. Currently, Cirque has amassed a debt in excess of US$900 million due to extensive expansions, but now is unable to get ahead due to the coronavirus pandemic. As a result, the company has had to lay off 95% of its workforce, in addition to cancelling all of its 44 shows.
If an agreement is reached among Cirque’s three other creditors, TPG Capital, Caisse de depot et placement, and Fosun, then the Quebec government would become a creditor of the company. If however, the existing shareholders decide to sell their stakes, then ultimately the province would become the owner of Cirque. Furthermore, there would be strict conditions attached to the loan, including that the company’s head office be located in Quebec along with the senior executives, and that the funds are not allocated towards paying out bondholders.
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