Even as provinces move forward with phased reopening plans, 14% of Canadian small businesses are at risk of permanently closing, according to a new report, Bloomberg News reported. About one in seven small- and medium-sized companies surveyed at the end of June by the Canadian Federation of Independent Business said they are at least somewhat considering bankruptcy or winding down operations as a result of Covid-19. That would represent about 158,000 businesses in addition to the ones that have already closed, CFIB said.
A record number of Canada’s largest businesses are seeking protection from creditors, a testament to the strains companies are under because of the coronavirus pandemic, Bloomberg News reported. In the three months through June, 27 firms were granted protection under the Companies’ Creditors Arrangement Act, a federal law that gives insolvent corporations that have debt of more than C$5 million ($3.7 million) an opportunity to restructure and avoid liquidation.
Mendocino Clothing Co., a Toronto-based retailer, has begun restructuring proceedings and plans to close stores to focus on online orders, Bloomberg News reported. The closely-held company filed a notice of intention to make a proposal under Canadian bankruptcy law on July 14, according to documents posted on the website of KSV Kofman Inc., the trustee. The documents listed Toronto-Dominion Bank as a secured creditor owed C$2.69 million ($1.99 million) and a further C$5.78 million owed to unsecured creditors including American Express and OPGI Mgmt.
Cirque du Soleil Entertainment Group said on Thursday 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.
Lenders to Cirque du Soleil Entertainment Group are working on an offer to replace the bid made by TPG and other shareholders of the company, which is restructuring under bankruptcy protection, Bloomberg News reported. The lenders are set to present a binding “credit bid” to a committee of Cirque’s board by Tuesday, a court hearing was told Friday. Credit bidding involves canceling outstanding debt as part of an offer to acquire a debtor’s assets. Cirque’s creditors have said previously they would also be willing to inject as much as $375 million to help the company restart.
Cirque du Soleil and its secured creditors are close to reaching a agreement on a second stalking horse bid for the financially strapped entertainment group, after lenders opposed a deal with shareholders including TPG Capital and Fosun International, a Canadian court heard today, Reuters reported. Canada’s once high-flying Cirque has received protection from creditors as it restructures after the COVID-19 pandemic forced it to cancel shows and lay off artists. The Montreal-based entertainment company filed for bankruptcy in late June.
Canadian employment rose by a record-setting 953,000 people in June as COVID-19 lockdown restrictions eased across the country, the Globe and Mail reported. Statistics Canada said today that combined with May’s gain of nearly 290,000 workers, the labour market has recovered about 40 percent of the three million jobs that were lost during the pandemic. The unemployment rate fell to 12.3 percent from May’s record of 13.7 percent. June’s employment gains were almost evenly split between full-time and part-time work.
The Canadian government is predicting a historic CDN$343 billion (US$254 billion) deficit for 2020-21 resulting from its economic and stimulus plans to battle COVID-19, the Associated Press reported. The amount, included in a fiscal “snapshot” the Liberal government released Wednesday, is a huge jump from the CDN$28.1 billion (US$20.8 billion) deficit projected prior to the pandemic. The report says that since March, the federal government has spent more than CDN$231 billion (US$171 billion) on health and safety measures as well as direct aid to Canadians and businesses.
Canada will ramp up issuance of long-term debt this year to finance its record budget deficit, Bloomberg News reported. The federal government plans to sell C$106 billion ($78 billion) of 10-year and 30-year bonds in the fiscal year that ends March 31, according to budget documents released Wednesday. That’s more than six times the C$17 billion of such bonds it sold last year.
DavidsTea is seeking court protection from creditors so it can continue operating while it restructures and plans to close a significant number of its stores, the Globe and Mail reported. The Montreal-based company said today that it will seek an order in Quebec Superior Court to allow it to restructure under the Companies’ Creditors Arrangement Act. It also plans to seek similar orders for its U.S. subsidiary under chapter 15 of the U.S. Bankruptcy Code.