Cirque du Soleil, Quebec talk loan

The government of Quebec is in discussions to lend as much as $ 500 million to Cirque du Soleil Entertainment Group, which shut down all of its shows because of the coronavirus pandemic, according to people with knowledge of the matter.

The loan from the provincial government’s investment arm, Investissement Québec, would come after Cirque received US$ 50 million from its top shareholders to stay afloat, according to the people, who asked not to be identified because the talks are private.

National Bank of Canada has been conducting talks with potential investors in the company.

“The Cirque has not asked the government for a dollar of financing,” the entertainment company chairman Mitch Garber said in a message. “Whether one of the many potential buyers have asked the government to lend that group a million or a billion dollars, I wouldn’t know, but asking the government for $ 500 million sounds absurd.”

Cirque’s board “has authorized a process for qualified interested financiers/ buyers to make preliminary proposals to recapitalize or acquire” the company, Garber said. A similar process allowed the company to raise that US$ 50 million from existing shareholders, he said.

Investissement Quebec declined to comment. National Bank confirmed its mandate, but declined to comment further.

Cirque, which has shows in Las Vegas including Mystère and Michael Jackson ONE, needs to address about US$ 900 million of senior loans.

S& P Global Ratings cut Cirque’s rating to D on April 3. The company failed to make principal and interest payments due March 31 on its first- lien credit facility and an interest payment on its second-lien facility.

On Wednesday, Cirque du Soleil founder Guy Laliberté indicated in an open letter that he might want back into the company.

Media company Quebecor Inc. said May 4 it made a proposal to Cirque to extend emergency financing to pay staff and suppliers, with the possibility of a longer- term investment. Quebecor said it “wanted to help save the Cirque” and would be prepared to “inject several hundred million dollars” to help the company, which grew from a troupe of Quebec street performers into a global live entertainment giant.

Laliberté said Quebecor would not be alone in its efforts and that “we’re about to see a wrestling match involving a number of players.”

“I am deciding whether or not I’m going to jump into that wrestling ring,” Laliberté wrote in the letter. He declined to comment when contacted by Bloomberg.