MONTREAL — Cirque du Soleil’s creditors are in a position to take control of the insolvent entertainment business after their purchase offer that precludes any contribution from Quebec taxpayers has been accepted.
The agreement will be presented Friday to the Superior Court of Quebec for approval to become the new so-called stalking horse bid for any rival offers that may be presented next month.
A lawyer representing Quebecor suggested last week that the media conglomerate intended to make a bid.
The managing director of Cirque’s largest creditor, Catalyst Capital Group, says the co-operation from creditors has been extraordinary to achieve the goal of recapitalizing the acrobatic company.
The lenders, who hold Cirque’s about $1 billion of secured debt, would inject up to $375 million, create a fund to retain employees and pay ex-workers and artisans, and maintain the company’s head office in Montreal, according to a source familiar with the matter, but who is not allowed to speak publicly.
The new offer would supersede the US$420-million bid by current shareholders — the Texan fund TPG Capital, the Chinese firm Fosun and the Caisse de depot et placement du Quebec — that was presented June 29 when Cirque filed for creditor protection. They were counting on a US$200-million loan from the Quebec government.