The Cirque du Soleil Entertainment Group has announced that it is seeking protection from its creditors to restructure its capital structure. The announcement comes after it has been forced to cancel shows due to the coronavirus pandemic.
The company filed for protection from its creditors under the Companies’ Creditors Arrangement Act. In connection with this, the company also entered into a “stalking horse” purchase agreement with its shareholders.
$300 million investment into the business
Under this agreement, the shareholders will take over the company’s liabilities and invest US$300m into the business. One of these liabilities is the ticketholders who have been affected by the cancelled shows.
The shareholders will also establish a fund of $20m to provide relief to employees and independent contractors.
As we move forward, we know that you will have questions and we will continue to share information with you. If you already have tickets, these remain valid. For all other questions, please refer to the FAQ section of our website: https://t.co/MGJfZUk8Qr pic.twitter.com/spJ46YFs0T
— Cirque du Soleil (@Cirque) June 29, 2020
Over 3,000 jobs lost
The Cirque du Soleil Entertainment Company has also terminated the employment of around 3,480 employees who were previously furloughed in March.
The company plans on rehiring a “substantial majority” of these employees, “business conditions allowing”, once operations can resume.
The Cirque du Soleil resident shows in Las Vegas and Orlando are expected to resume before its other shows, and so these staff members have not been affected by this decision. This will allow these residency shows to restart as soon as possible.
The company’s application for bankruptcy protection will be heard by the Superior Court of Quebec on June 30.
Cirque du Soleil JOYÀ will reopen on July 3
One Cirque du Soleil show will reopen soon. The Cirque du Soleil JOYÀ will reopen at the Vidanta Riviera Maya resort on July 3. The resort, owned by Grupo Vidanta, features the only Cirque du Soleil show in the world to include a culinary experience.
Daniel Chávez Morán, the founder of Grupo Vidanta, said in a statement that “We are proud to be close collaborators with Cirque du Soleil and will continue to work as two families, united with the aim of bringing Mexico captivating entertainment experiences of the highest quality.”
Grupo Vidanta and Cirque du Soleil are also collaborating on a water-themed resident show and dinner experience at the new Vidanta Nuevo Vallarta resort. Expected to open in 2021, the show will accommodate 600 guests.
The Vidanta Nuevo Vallarta resort will have three themed resort hotels, a natural park and 10 unique attractions, according to Toluca la Bella Cd.
Images: Cirque du Soleil