The Canadian company Cirque du Soleil, famous for its spectacular acrobatic performances, has announced that it will cut about 95% of its employees and that it has filed a lawsuit for protection from creditors. Only those from the permanently based shows in Las Vegas and Orlando will be hired to resume work as soon as possible.
“We have been a successful and profitable company for 36 years. But with zero revenue due to the forced suspension of our performances due to COVID-19, management had to act decisively to protect the company’s future,” said CEO Daniel Lamar.
The restructuring plan plans to lay off 3,480 people, but also to set aside $ 15 million to help them while they are hired back. To restart the business will deteriorate $ 300 million against the background of about $ 1 billion in debt.
Investissement Québec, an agency in the province of Quebec where the company is registered, will invest $ 200 million in debt restructuring. But according to Reuters, investors and creditors are unlikely to accept the scheme because they say they will get back a 45% stake in the restructured company.
There is already an agreement with the group that still controls a majority stake – the private equity fund TPG Capital, China’s Fosun International Ltd and Canada’s Caisse de depot et placement du Québec. They will take on debt payments and invest the $ 315 million in question.
The court must first approve the scheme.