By Jessica DiNapoli and Mike Spector
(Reuters) – Creditors of Cirque du Soleil Entertainment Group led by private equity firm Catalyst Capital Group Inc made an offer on Monday to take control of the circus company through a debt restructuring in Canada, a person familiar with the matter said.
The group of creditors is proposing to invest $300 million in Montreal-based Cirque and reduce its $1.2 billion debt pile by $900 million, the person said. The creditor group, which also includes asset managers BlueMountain Capital and Sound Point Capital Management LP and others, holds nearly three-quarters of Cirque du Soleil’s debt, the person said.
Cirque started exploring debt restructuring options, including a possible bankruptcy in March, after it was forced to cancel shows because of the coronavirus outbreak.
The company, famous for its shows in Las Vegas, had to temporarily lay off most of its staff after nationwide coronavirus shutdowns nixed its performances.
Bids for Cirque du Soleil were due on Monday, people familiar with the matter said.
Any deal would likely be completed through a court restructuring in Canada, the sources said. The timing of any court restructuring remains in flux as Cirque du Soleil prepares to review bids, one of the sources said.
It is unclear if the creditor group’s bid will be accepted. But as Cirque du Soleil’s creditors, the group will have a say over the path of the company’s restructuring, the source added.
The sources requested anonymity because the matter is confidential. Dan Gagnier, a spokesman for Catalyst, as well as Cirque du Soleil and BlueMountain Capital declined to comment, while Sound Point did not immediately respond to requests for comment.
Officials from Canada’s Quebec province have also offered $200 million in aid to Cirque du Soleil, which started as a ragtag group of street performers in Canada.
Private equity firm TPG acquired a majority stake of Cirque du Soleil in 2015 in a $1.5 billion deal.
The New York Post first reported on the offer on Monday.
(Reporting by Jessica DiNapoli and Mike Spector in New York; Editing by Aurora Ellis)
