Cirque du Soleil’s Cancelled Shows May Result in a Bankruptcy Filing

Cirque du Soleil explores debt restructuring options and has temporarily laid off a majority of its staff due to the worsening coronavirus

Mar 31, 2020 | By Julia Roxan

Affecting over 4,600 employees and about 95 per cent of its overall workforce, Cirque du Soleil is exploring debt restructuring options, including a potential bankruptcy filing in light of the worsening coronavirus.

Forced to cancel their regular Las Vegas shows, the revered Montreal-based circus company has temporarily laid off a majority of its staff due to the precautionary social distancing measures put in place by governments both world-and-state-wide.

Facing an estimated US$900 million debt, Cirque du Soleil and its creditors have announced a dialogue addressing the increasing cash crush and future negotiations. With no defined plan to manage its strained finances, or official statement from the company — a large part of Cirque du Soleil’s debts stem from a US$1.5 billion deal with a private equity firm TPG taken up in 2015.

Currently regarded as a “high risk” company due to its overwhelmingly steep debt, Cirque du Soleil had about US$105 million in funds available as of December, consisting of US$20 million in cash and the rest from a revolving credit line, however with the virus-caused inactivity, the company is expected to spend at least US$165 million on ticket reimbursements for cancelled shows and debt repayment, throughout the remainder of the year — as investors face growing concern regarding the company’s ability to repay all of its debts. To find tickets online is now a challenge as many companies are facing similar financial problems.

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