Cirque du Soleil has fallen on difficult financial times due to the coronavirus pandemic, announcing Monday that it had filed for bankruptcy. The Montreal-based company listed the cause of its filing the "immense disruption and forced show closures as a result of the COVID-19 pandemic" and said it would attempt to restructure its debt with assistance from the Canadian government and private equity firms. As part of this financial crisis, CNN reports the entertainment company has laid off roughly 3,500 employees.
Cirque's bankruptcy filing came just three months after it was forced to suspend production of its shows, including the six incredibly popular residencies in Las Vegas, due to the spread of the coronavirus. The company has about 10 shows on tour internationally, including O, Michael Jackson One, and The Beatles LOVE.
"For the past 36 years, Cirque du Soleil has been a highly successful and profitable organization," Daniel Lamarre, CEO of Cirque du Soleil Entertainment Group said in a press release. "However, with zero revenues since the forced closure of all of our shows due to COVID-19, management had to act decisively to protect the company's future."
The Canadian entertainment company added it has entered a "stalking horse" agreement with existing shareholders including TPG Capital, Fosun International Ltd, and Caisse de depot et placement du Québec, under which the group will take over the company's liabilities and invest $300 million. This funding will "support a successful restart, provide relief for Cirque du Soleil's affected employees and partners, and assume certain of the company's outstanding liabilities," according to the release. Government body Investissement Québec will also provide $200 million in debt financing as part of the agreement.
Cirque du Soleil isn't the only company struggling to stay above water amid the coronavirus pandemic. Also on Monday, vitamin and dietary supplement chain GNC announced it too had declared bankruptcy and will close at least 800 of its 7,300 stores. In a statement posted to its website, GNC said it had been "under financial pressure for the past several years" but the COVID-19 pandemic "created a situation where we were unable to accomplish our refinancing and the abrupt change in the operating environment had a dramatic negative impact on our business."
"As a result, we felt the best opportunity for us to continue to improve our capital structure and address certain operational issues was to restructure through a Chapter 11 reorganization," the statement continued.