A moment from the Cirque du Soleil in London, in a file image.Paul Hackett / Reuters
The most famous circus company on the planet has new owners.
The Circo del Sol officially announced on Tuesday that the procedures for its recapitalization have concluded, thus withdrawing the protection provided by the laws in Canada and the United States.
And the new owners are precisely its main creditors, led by Catalyst.
The operation is around 1,200 million US dollars (about 1,010 million euros).
Thus ends an eight-month soap opera in which the company that revolutionized shows was affected by covid-19 and a colossal debt.
"I can confirm that the continuity of the Circus is assured and that we are going to relaunch the different shows as the world returns to normality," Daniel Lamarre, president and CEO of Circo del Sol, told EL PAÍS. The new owners trust the 19 years of Lamarre experience at the head of the firm.
“We thought first of reopening our fixed shows in Las Vegas and Orlando, since the technicians and artists live in these cities.
Hopefully it's late spring or early summer.
The vaccine is central to our plans.
For the tours it will be a little longer, possibly in the fall, because we have to repatriate the artists that we have scattered in about 50 countries ”, adds Lamarre.
Due to the pandemic, the Circo del Sol announced on March 11 the suspension of 44 shows and the dismissal of 95% of its staff.
On June 29, he filed for bankruptcy requesting protection under the Canadian Business Accords and Creditors Act and Chapter 15 of the United States Bankruptcy Act.
Covid-19 was viciously hitting the circus firm, although not all its problems were recent.
The Moody's agency had already been pointing out for some years that its debt was very high.
90% of the Circus was acquired in 2015 by the American TPG Capital (55%), the Chinese fund Fosun (25%) and the Quebec Savings and Investments Fund (10%), but much of the money from this transaction was turned into company debt.
Last July it was announced that the firm owed about 1.1 billion US dollars.
On the same day it declared bankruptcy, the Circo del Sol announced a restructuring agreement in principle with the owners, who would disburse $ 100 million from their checkbooks and accept a 200 million loan from the Québec government.
This amount was declared as the minimum to be considered in case other groups expressed interest.
The lawyers of the main creditors of the Circus maintained that they could not accept the offer of the owners and that they had a more generous one.
The group, led by Catalyst (which also includes BlueMountain Capital, Sound Point, among other firms) presented a plan that a judge of the Superior Court of Quebec later accepted as the reference.
The proposal was for 1,200 million US dollars: 800 million of the guaranteed debt would be eliminated, 375 million of injection in fresh notes and an additional 25 million to cover debts with contractors, all this without government aid.
In return, they would take full control of the Circus.
Canadian media mentioned that some US companies could submit an offer.
Two major players in Quebec expressed their interest in the bid: the Québecor media conglomerate and Guy Laliberté, one of the founders of the circus firm.
The deadline for submitting proposals was August 18.
None exceeded that of the creditors, but the Circus preferred to make the official announcement on Tuesday, when all the movements were concluded.
The board of directors will be chaired by Jim Murren and Gabriel de Alba.
Murren was until a few months ago CEO of MGM Resorts International.
De Alba is Chief Operating Officer and Partner of Toronto-based Catalyst.
“El Circo del Sol is an important company founded on artistic talent and vision, as well as on extraordinary entertainment experiences for the public.
Guided by its excellent management team and by their skills and experience, the company has potential for global expansion and growth, ”de Alba said in a statement.
The Circus has served as one of the great cultural ambassadors of Quebec.
It will be the first time since its founding in 1984 that a Québec group does not occupy a place at the table of owners.
In this regard, the opposition parties have launched numerous criticisms of the provincial government.
In addition, they have stressed that the Quebec Savings and Investments Fund ultimately lost 170 million US dollars.
“The plan stipulates that the headquarters will remain in Montreal for at least the next five years.
However, we have studios, costume workshops, among other facilities in the city.
Moving all of this would be a very strong investment, ”says Lamarre.
“The Circus will continue to be closely linked to Quebec.
95% of the management team is Québec.
Here we have developed unique creation and production plans in the world.
We must protect them, as they will continue to be the basis of our success, ”he adds.
For the circus firm, its sights are set on the relaunch of the shows.
The exploration of other products is also contemplated in this new stage.
In an interview last August with
The Globe and Mail
, Gabriel de Alba commented on the idea of Circo del Sol venturing into
“De Alba believes a lot in our potential for digital development.
During the pandemic, we created CirqueConect, which has allowed us to distribute a lot of content in recent months.
We have reached 62 million people.
This has shown us the demand for our content;
also that if we can adapt them exclusively through digital platforms, there may be an important possibility of generating new income, ”says Lamarre.