(Reuters) - Cirque du Soleil Entertainment Group is exploring debt restructuring options that include a potential bankruptcy filing, after it was forced to cancel shows because of the coronavirus outbreak, people familiar with the matter said.
The famed Montreal-based circus company, largely known for its regular shows in Las Vegas venues, had to temporarily lay off most of its staff after social distancing measures put in place to prevent the spread of the virus nixed its performances.
Cirque du Soleil is working with restructuring advisers to address a cash crunch and its roughly $900 million in debt, the sources said on Thursday.
Creditors are also in talks with advisers as they prepare for possible negotiations with the company, the sources said.
Cirque du Soleil has not yet decided how to address its strained finances, the sources cautioned, requesting anonymity to discuss confidential deliberations. The company declined to comment.
Cirque du Soleil’s current woes have been exacerbated by debt taken on to fund a $1.5 billion deal in 2015 that resulted in private equity firm TPG acquiring a majority stake in the company. TPG has enlisted its own restructuring advisers to work through the company’s deteriorating finances, the sources said. The private equity firm declined to comment.
Moody’s Investors Service earlier this month cut Cirque du Soleil’s credit rating deep into junk territory and said there was a “high risk” the company would default on its debt. Canceled shows this year are expected to result in steep financial losses for the company “with limited prospects for a tenable capital structure thereafter,” the ratings firm said in a March 18 note.
In other news down the Covington chute: World Circus Day Cancelled, Circo Caballero Stranded in a Parking Lot.