MONTREAL -- Cirque du Soleil was in a vulnerable position before the COVID-19 pandemic paralyzed its activities, according to a report.
Carried out by Ernst & Young – the firm overseeing Cirque du Soleil’s restructure under creditor protection – the report shows the company’s net loss gradually increased from USD $10 million to USD $80 million from 2017 to 2019.
The circus also went into significant debt during its attempt to accelerate its growth, but several acquisitions helped increase revenues from USD $882 million to USD $1.04 billion during that period.
On Monday, Cirque du Soleil CEO Daniel Lamarre said the company's profits totalled about USD $155 million last year, but that amount doesn’t factor in interest, taxes or depreciation.
As of March 31, the company’s various debts totalled nearly USD $1.6 billion, according to a document filed with the Superior Court of Quebec.
As part of the restructuring, the company’s current shareholders – the Texan fund TPG Capital, the Chinese firm Fosun and the Caisse de depot et placement du Quebec – signed a purchase agreement of USD $300 million in which the loan of USD $200 million by Investissement Québec will be used.
These are the minimum conditions to be met if other players want to submit a proposal to acquire the entertainment company.
This report by The Canadian Press was first published July 2, 2020.
