Cirque du Soleil
UPDATE 3: Cirque du Soleil 1L Lender Group Selects Houlihan Lokey as Financial Advisor
Tue 03/31/2020 11:50 AM
UPDATE 3: 11:50 a.m. ET 3/31/2020: A group of lenders to Cirque du Soleil’s $815 million first lien term loan due 2022 has selected Houlihan Lokey as financial advisor, according to sources.
Houlihan Lokey did not immediately respond to a request for comment.
--Harvard Zhang
UPDATE 2: Cirque du Soleil Working With Kirkland & Ellis
UPDATE 2: 5:43 p.m. ET 3/26/2020: Cirque du Soleil is working with Kirkland & Ellis as legal advisor, as the circus producer evaluates options to address its weak liquidity and a potential breach of the 5.25x net first lien leverage springing covenant in its revolver, according to sources.
“Cirque du Soleil Entertainment Group is working with all its partners, as well as the federal and provincial governments, to identify how to best support the company and rebuild once the global crisis subsides,” a company spokesperson said in an emailed statement. “As a reminder, when this crisis started, the Group had 44 active shows in its portfolio. As soon as we will be able to reopen, we will become again the profitable company we were.”
Kirkland & Ellis did not immediately respond to a request for comment.
--Harvard Zhang
UPDATE 1: Cirque du Soleil Working With Greenhill on Balance Sheet Options
UPDATE 1: 11:32 a.m. ET 3/26/2020: Cirque du Soleil is working with Greenhill as financial advisor to explore balance sheet options, according to sources.
The company and the investment bank did not immediately respond to requests for comment.
--Harvard Zhang
Original Story 1:21 p.m. UTC on March 25, 2020
New Coverage: Cirque du Soleil Temporarily Suspends Performances, Lays Off 95% of Workforce; 1L Term Lenders Organize With Milbank
Cirque du Soleil, a private Montreal-based producer of live entertainment including circus arts shows, recently announced the temporary suspension of its performances and companywide layoffs amid the escalation of the coronavirus pandemic. Following the announcement, a group of lenders to the $815 million first lien term loan due 2022 has organized with Milbank as legal advisor, according to sources.
An illustrative capital structure is shown below:
In a March 18 report, Moody’s noted the company’s weak liquidity, with about $20 million of cash on hand and $85 million of availability under its revolver as of December 2019 and anticipated negative free cash flow in 2020 that could be exacerbated by potential ticket reimbursements. The ratings agency said it expects the company to breach the 5.25x net first lien leverage springing covenant in the revolver.
Since the beginning of the year, Cirque du Soleil has made the following updates regarding the impact of the coronavirus pandemic on its operations:
Cirque Du Soleil was acquired in 2015 by TPG Capital, Fosun Industrial Holdings and Caisse de dépôt et placement du Québec. Founder Guy Laliberté retained a minority stake in the company. The company has acquired several live entertainment companies since the buyout, including Blue Man Group in 2017, VStar Entertainment Group in 2018 and The Works Entertainment in 2019. In February, Caisse de dépôt et placement du Québec purchased Laliberté’s stake.
Milbank did not respond to a request for comment.
--Andrew Berlin, Harvard Zhang
Houlihan Lokey did not immediately respond to a request for comment.
--Harvard Zhang
UPDATE 2: Cirque du Soleil Working With Kirkland & Ellis
UPDATE 2: 5:43 p.m. ET 3/26/2020: Cirque du Soleil is working with Kirkland & Ellis as legal advisor, as the circus producer evaluates options to address its weak liquidity and a potential breach of the 5.25x net first lien leverage springing covenant in its revolver, according to sources.
“Cirque du Soleil Entertainment Group is working with all its partners, as well as the federal and provincial governments, to identify how to best support the company and rebuild once the global crisis subsides,” a company spokesperson said in an emailed statement. “As a reminder, when this crisis started, the Group had 44 active shows in its portfolio. As soon as we will be able to reopen, we will become again the profitable company we were.”
Kirkland & Ellis did not immediately respond to a request for comment.
--Harvard Zhang
UPDATE 1: Cirque du Soleil Working With Greenhill on Balance Sheet Options
UPDATE 1: 11:32 a.m. ET 3/26/2020: Cirque du Soleil is working with Greenhill as financial advisor to explore balance sheet options, according to sources.
The company and the investment bank did not immediately respond to requests for comment.
--Harvard Zhang
Original Story 1:21 p.m. UTC on March 25, 2020
New Coverage: Cirque du Soleil Temporarily Suspends Performances, Lays Off 95% of Workforce; 1L Term Lenders Organize With Milbank
Cirque du Soleil, a private Montreal-based producer of live entertainment including circus arts shows, recently announced the temporary suspension of its performances and companywide layoffs amid the escalation of the coronavirus pandemic. Following the announcement, a group of lenders to the $815 million first lien term loan due 2022 has organized with Milbank as legal advisor, according to sources.
An illustrative capital structure is shown below:
In a March 18 report, Moody’s noted the company’s weak liquidity, with about $20 million of cash on hand and $85 million of availability under its revolver as of December 2019 and anticipated negative free cash flow in 2020 that could be exacerbated by potential ticket reimbursements. The ratings agency said it expects the company to breach the 5.25x net first lien leverage springing covenant in the revolver.
Since the beginning of the year, Cirque du Soleil has made the following updates regarding the impact of the coronavirus pandemic on its operations:
- Jan. 23: Cancellation of performances of “The Land of Fantasy” in Hangzhou, China.
- March 13: Temporary suspension of eight Big Top and five Arena touring shows.
- March 15: Temporary suspension of seven resident shows in Las Vegas.
- March 17: Temporary suspension of the start of preview performances of “Drawn to Life” planned for March 20 at Walt Disney World’s Disney Springs, Fla., complex.
- March 19: Temporary reduction of 95% of its workforce, comprising 4,679 employees.
Cirque Du Soleil was acquired in 2015 by TPG Capital, Fosun Industrial Holdings and Caisse de dépôt et placement du Québec. Founder Guy Laliberté retained a minority stake in the company. The company has acquired several live entertainment companies since the buyout, including Blue Man Group in 2017, VStar Entertainment Group in 2018 and The Works Entertainment in 2019. In February, Caisse de dépôt et placement du Québec purchased Laliberté’s stake.
Milbank did not respond to a request for comment.
--Andrew Berlin, Harvard Zhang
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