Cirque du Soleil accepted a recapitalization offer from its creditors on Thursday, after an earlier deal with shareholders including TPG Capital and Fosun International Ltd was dismissed by lenders.
Catalyst Capital Group, which led the group of creditors, said the entertainment company had accepted its "stalking horse bid" for its assets. A stalking horse bid is an opening offer that other interested bidders must surpass if they want to buy the company.
The deal will inject up to $375 million into financially-strapped Cirque du Soleil, a source familiar with the matter said.
The Montreal-based company, which grew from a troupe of street-performers in the 1980s to a company with global reach, has slashed about 95% of its workforce and suspended shows due to the COVID-19 pandemic.
The company filed for bankruptcy protection on Monday.
The agreement with the creditor group would also set up a fund for employees and ensure payments to artisans and tradespeople owed, the source said,
The deal still needs court approval and will be presented on Friday.
"We are pleased to see that the Creditors have incorporated these key undertakings into their bid - including commitments to Quebec and dedicated funds for affected employees and contractors," the shareholder consortium, which includes TPG, said.
Cirque, renowned for its extravagant shows featuring acrobats, jugglers, firebreathers and musicians, did not immediately respond to a request for comment.
(Reporting By Allison Lampert in Montreal; Additional reporting by Uday Sampath in Bengaluru; Editing by Shounak Dasgupta) ((UdaySampath.Kumar@thomsonreuters.com; within U.S.+1 646 223 8780; Twitter: @sampath_uday; Reuters Messaging: UdaySampath.Kumar.email@example.com))