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Cirque du Soleil Entertainment Group said yesterday it reached a new purchase agreement with its secured lenders, in a move that would help kick-start the bidding process for the financially strapped circus troupe, Reuters reported. The Cirque said in a statement that it entered into a new stalking-horse purchase agreement with its first-lien and second-lien secured lenders, confirming earlier reports. The Montreal-based Cirque, which grew from a troupe of street-performers in the 1980s to a company with global reach, has slashed about 95 percent of its workforce and suspended shows due to the COVID-19 pandemic. The creditors’ agreement replaces an earlier deal with Cirque shareholders including TPG Capital and Fosun International Ltd which included debt financing from a Quebec government body. A court in the Canadian province of Quebec will be asked on Friday to approve the stalking-horse agreement, which is an opening offer that other interested bidders must surpass if they want to buy the company. The deal allows the creditors to acquire the Cirque’s assets while largely cutting down the company debt, the statement said. Cirque has $1.1 billion in debt across first-lien and second-lien creditors.

Aeromexico, Mexico’s largest airline, defaulted on interest payments for two debt issuances, a representative for the debt holders said yesterday, Reuters reported. Like other airlines, Aeromexico has been suffering from a drop in demand caused by the coronavirus pandemic. Late last month, the company said it had initiated chapter 11 bankruptcy proceedings. The default was for a total amount of 3 million Mexican pesos ($135,000), financial group CI Banco said in a statement sent to the Mexican stock exchange.

Wirecard AG’s insolvency is inflicting pain on some banks who lent to the once-highflying, now-insolvent German fintech, the Wall Street Journal reported. Some of Europe’s largest lenders anticipate recovering as little as 20 percent of the almost $2 billion they are owed. Meanwhile some banks seeking an exit from their portion of the loan are challenged to find buyers at cents on the euro even as Wirecard’s insolvency administrator seeks to sell the company’s assets to pay off debt. Those struggles underscore expectations among some investors, investment bankers and restructuring experts that Wirecard’s lenders and other creditors are unlikely to recoup much of what they are owed. Fraud allegations against Wirecard over its accounting will push potential buyers to comb through the company’s books to evaluate the businesses. But that takes time, raising the risk of Wirecard customers flocking to rivals and further undermining any effort to realize value from asset sales. Wirecard’s debt load includes a €1.75 billion ($2 billion) revolving credit facility. Lloyds Banking Group PLC is one of the 15 lenders to that facility. It is owed around €120 million, yet sold the holding recently at around 18 cents on the euro to distressed debt hedge funds, according to the people and others familiar with the transaction. The move suggests the bank didn’t expect insolvency proceedings to generate much value for stakeholders.

Cirque du Soleil Entertainment Group is preparing to reject a buyout offer from shareholders in favor of a competing proposal from lenders that have offered to supply $375 million in new loans while taking control of the bankrupt company, WSJ Pro Bankruptcy reported. The restructuring proposal from Cirque’s top lenders would supersede an offer by shareholders TPG Capital, Fosun International Ltd. and Caisse de dépôt et placement du Québec, which had hoped to preserve their stakes in the company without fully repaying its debt. The Montreal-based company’s board is close to accepting the lender offer as the lead bid, subject to better offers, and could do so as soon as Wednesday. Any sale of the company requires approval from the Montreal court overseeing Cirque’s bankruptcy. The company could continue to entertain other proposals. Cirque was forced to shut down its shows world-wide as the COVID-19 pandemic spread, choking off virtually all of the company’s revenue and forcing it to lay off close to 3,500 employees.

Mexico’s Interjet said yesterday that it received a $150 million capital injection to help the company through a major restructuring in a bid to offset the crisis in the airline sector as the coronavirus pandemic choked global travel, Reuters reported. Interjet, one of Mexico’s three biggest airlines with a portfolio of more than 50 routes, announced restructure plans last month as local media speculated about the carrier’s financial health. The struggling Mexican airline said a group of investors, headed by businessmen Carlos Cabal and Alejandro del Valle, has injected capital to help shore up the company. Rival Aeromexico has already filed for chapter 11 bankruptcy proceedings.

Mexican retailer Grupo Famsa on Friday said it was withdrawing U.S. chapter 11 bankruptcy proceedings for the holders of its bond notes expiring in 2020, Reuters reported. The retailer added that the proceedings would continue for its other debt, with the next hearing on July 28.

The U.S. entity of Japanese retailer Muji, known for its minimalist home goods, filed for bankruptcy, adding to a growing list of industry companies reeling from the COVID-19 pandemic, Bloomberg News reported. Muji U.S.A Ltd., which is operated by Ryohin Keikaku Co., filed for chapter 11 in Delaware, according to a filing. It listed assets and liabilities in the range of $50 million to $100 million, and estimated the number of creditors at 200 to 999. Ryohin Keikaku said in a separate statement that Muji U.S.A. filed for bankruptcy due to shutdowns from the coronavirus. The company had been grappling with losses due to high rent and other costs, and was taking steps to improve sales and renegotiate rents before the pandemic hit, it said. In the last fiscal year, sales from U.S. operations, where there are 19 stores, made up about 2.5 percent of Ryohin Keikaku’s revenue. The U.S. business has been operating at a loss for the past three fiscal years. Last year, it had a loss of around $10 million, according to its bankruptcy statement.