MONTREAL -- Cirque du Soleil’s creditors are irritated by its recovery strategy and plan to oppose the purchase agreement between the entertainment company and its shareholders that they believe is "doomed to fail." 

A group composed of 13 institutions that hold the company’s debt of USD $1 billion want instead for their proposal to be privileged. Their proposal plans to keep the Cirque’s head offices in Montreal and does not rely on contributions from the Quebec government.

In an application filed with the Superior Court at the end of June, the creditors asked that the offer of the current shareholders – the Texan fund TPG Capital, the Chinese firm Fosun and the Caisse de depot et placement du Quebec – not be considered the starting point for auctions. They feel that they should have a chance to negotiate directly with advisors appointed by the company.

The hearing is scheduled for July 10 under the Companies' Creditors Arrangement Act (CCAA) process.

Cirque du Soleil’s current owners are proposing to inject USD $300 million into the company, which would be made possible by a loan of USD $200 million offered by Investissement Québec. In exchange for debt restructuring, creditors would get 45 per cent of the company, while current owners would share the remaining 55 per cent.

This report by The Canadian Press was first published July 3, 2020.