Canadian cultural icon Cirque du Soleil -- currently under court bankruptcy protection -- accepted a purchase offer from its creditors Thursday, which will serve as a minimum bid for an investors auction in August.
The creditors "would acquire substantially all of the Company's assets" in the agreement, according to a statement from the global entertainment giant.
The new agreement replaces the arrangement that Cirque du Soleil and its current shareholders -- American TPG, Chinese Fosun and Caisse de depot et placement du Quebec (CDPQ) -- made in late June.
The Montreal-based circus troupe, which was founded in Quebec in 1984, was forced to cancel 44 shows around the globe in March as efforts to curb the coronavirus pandemic prevented large audiences from gathering.
The company has since furloughed 4,679 acrobats and technicians -- or 95 percent of its workforce. Most were officially let go in late June when the company filed for bankruptcy protection.
The Superior Court of Quebec, which is supervising the company's restructuring, is set to rule on its approval of the plan during a hearing Friday.
The accord would see lenders inject between $300 million and $375 million into the company while also reducing its guaranteed debt to $300 million from $1.1 billion, according to the Canadian Daily Globe and Mail. It also includes a promise to maintain Cirque du Soleil's Montreal headquarters for at least another five years.
Creditors had disputed the previous agreement allowing shareholders to purchase the group because it would have seen the creditors recoup a smaller share of the debt that the company owes them.
"We are very pleased to have come to this agreement with Cirque du Soleil," Gabriel de Alba, managing director and partner at Cirque du Soleil's most important creditor Catalyst Capital Group, said in a statement.
"The cooperation of the creditor group has been extraordinary to achieve our objective to recapitalize and revitalize the Cirque," he said.
Other investors have already planned to outbid the creditors -- offers for which are due August 18.
Among them are Cirque du Soleil founder Guy Laliberte, the former fire-eating performer who sold the group as well as Quebec media empire Quebecor in 2015.